U.S. Equity Option Market Makers Case Study 2024: Unveiling the New Era of U.S. Equity Option Trading, A 45,000-Word Analysis of Market Makers and Strategies

Core Strategies, Market Shares, and Trading Velocity Across 17 Leading Proprietary Firms in 5 Key Derivative Classes from 2019-2023

Dublin, Nov. 20, 2024 (GLOBE NEWSWIRE) — The “U.S. Equity Option Market Makers – Core Strategies and Market Shares, 2019-2023” report has been added to ResearchAndMarkets.com’s offering.

This 45,000-word case study provides the mostcomprehensive analysis to date based on the modeling of 17 proprietary trading firms who serve variously as market makers in U.S. equity derivatives across the backdrop of 5 interconnected product classes in futures and options.

The objective of this year-long research project was to shed new light on US equity option market mechanics by exploring the products, players and strategies that comprise the dramatic increase in total contract volume – with specific emphasis on the 5-year focus period, 2019-2023, that symbolizes what the analyst believes is a new era in U.S. equity option trading.

Though the unprecedented scale of this case study is indicative, this is the analyst’s current version of a masterpiece; the new crown jewel in a unique research library developed by hand, exclusively with publicly-available data (with the exception of certain daily market data samples), over years of consistent focus, patience and curiosity.

After a detailed introductory setup, this report is organized in 3 sections:

• First, market composition is presented to showcase the volumes and interconnected nature of all relevant US equity derivative product classes.
• Second, a new strategy factor library is leveraged to highlight core strategy preferences of the 17 members of the “featured option market making group,” wherever applicable.
• And third, based on interpretations from the prior sections, the output of a 2-factor model, that hinges on estimates of weighted average annual trading velocity per market maker, drives the volume share estimates – together, all of which yielding innumerable discoveries and insights about these players and this ecosystem.

Featured Market Makers:

• Akuna Securities
• Belvedere Trading
• Chicago Trading Company
• Citadel Securities
• Cutler Group
• Group One Trading
• GTS Securities
• HAP Trading
• IMC Financial Markets
• Jane Street Options
• Old Mission Capital
• Optiver US
• Simplex Trading
• Susquehanna Securities
• Two Sigma Securities
• Walleye Trading
• Wolverine Trading

Data Sample

The Storyboard and select findings contained in this case study represent the publisher’s analysis and interpretation of the largest and most diverse dataset for any case study in its history. The supporting data sample for this report has been sourced from the following:

• Quarterly 13F holdings reports (including 13F-HR/A amendment reports, wherever applicable) for numerous trading entities – including market makers, asset managers, and other financial intermediaries – over the maximum available time range for each entity ending December 31, 2023 (or, Q4 2023);
• The analyst’s proprietary 13F Security Master (multi-identifier version under development), Q1 2008-Q2 2024;
• Quarterly Rule 606 reports – containing monthly trade data – filed by 17 retail-oriented brokerage entities covering the maximum of the period beginning January 2020 and ending March 2024, wherever applicable;
• Annual Form X17a5 reports for each option market making entity over the maximum available period beginning December 31, 2001, and ending December 31, 2023;
• BrokerCheck detail reports from FINRA (Financial Industry Regulatory Authority);
• Monthly and annual US equity option market data from Option Clearing Corporation (OCC);
• Monthly US equity index futures and futures options market data from CME Group;
• Monthly US equity stock market data from SIFMA (Securities Industry and Financial Markets Association);
• Select daily US equity option market data from Option Research and Technology Services (ORATS);
• Periodic presentation information on US equity option markets from CBOE Global Markets;
• Any other peripheral data or content referenced in this report that was available from open and public sources or searchable on the surface internet; and,
• Competitive and other contextual modeling, exhibits, case studies, Feed posts and/or any other pre-existing content from the analyst’s research library.

Key Topics Covered:

• Introduction
• Data Sample
• Glossary and Abbreviations
• Companies Mentioned
• Storyboard
• Market Composition
• Constituencies
• Contextual History
• Complexity and Evolution
• Customer Bias
• Core Strategies
• Broad Market Volatility Traders
• Broad Market Flow Traders
• Index Dispersion Traders
• ETF Dispersion Traders
• Special Situations Traders
• Wholesale Market Makers
• Market Share
• Equity Index Options
• Retail Customer Order Flow
• Volume Share By Market Maker
• Conclusion
• The Complexity Curve
• Retail Option Allocation Framework
• Institutional Option Customers
• Author’s Note
• Appendix I Vignettes
• Strategy Factor Library, V1 (2)
• Structural Alpha Measurement (5)
• Open Interest Rank by Account Type and Entity (3)
• Put/Call/Buy/Sell Biases Stock and ETF Options (7)
• Retail Option Order Estimates and Rates Analysis (6)
• SPY/SPX Options Focus (10)
• Quarterly Metric Translations (7)
• Appendix II – Market Ecosystem Framework
• Key Landscape Drivers
• Alpha Capacity Elasticity
• Historical Perspective
• Factor Dimensionality and the Omnitrade
• Prop Shop Demographics

Companies Featured

• Akuna Securities
• Ally Invest Securities
• APEX Clearing
• Balyasny Asset Management
• Belvedere Trading
• CBOE Global Markets
• Charles Schwab Corporation (TD Ameritrade, Inc., TD Ameritrade Clearing, Inc.)
• Chicago Board Options Exchange (CBOE)
• Chicago Trading Company (CTC)
• Citadel Clearing
• Citadel Securities
• CME Group
• Commodity Futures Trading Commission (CFTC)
• Cubist Systematic Strategies
• Cutler Group
• D. E. Shaw Group
• Dash Financial Technologies (Dash)
• eToro USA Securities
• Fidelity Brokerage Services (FBS)
• Financial Industry Regulatory Authority (FINRA)
• FirstTrade Securities
• Global Execution Brokers (GEB / SIG)
• Group One Trading (GOT)
• GTS Securities (GTS)
• HAP Trading (HAP)
• Hull Trading
• IMC-Chicago, LLC (dba – IMC Financial Markets)
• IMC Financial Markets (IMC)
• IMC Trading BV
• Interactive Brokers (IBKR)
• Jane Street Capital (JSC)
• Jane Street Global Trading
• Jane Street Group (JSG)
• Jane Street Options (JSO)
• Latour Trading
• Matrix Executions
• Millennium Management
• Morgan Stanley & Co (MSCO) (E*Trade Securities, Morgan Stanley Smith Barney (MSSB))
• Old Mission Capital (OMC)
• Open to the Public Investing (OTTP – Public.com)
• Optiver Holding BV
• Optiver US
• Optiver VOF
• O’Connor & Associates
• Parallax Volatility Advisors
• Peak6 Group
• Robinhood Securities (RHS)
• Simplex Trading
• Susquehanna International Group (SIG)
• Susquehanna Securities
• Tastytrade
• Tower Research Capital (TRC)
• Tradestation Securities
• Tradier Brokerage
• Two Sigma Securities (TSS)
• U.S. Securities and Exchange Commission (SEC)
• Vanguard Brokerage Services
• Virtu Americas
• Walleye Trading
• Walleye Capital
• Webull Financial
• Wells Fargo Clearing Services
• Wolverine Trading
• Wolverine Asset Management

For more information about this report visit https://www.researchandmarkets.com/r/72of5d

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world’s leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

CONTACT: CONTACT: ResearchAndMarkets.com 
         Laura Wood,Senior Press Manager 
         [email protected]
         For E.S.T Office Hours Call 1-917-300-0470 
         For U.S./ CAN Toll Free Call 1-800-526-8630 
         For GMT Office Hours Call +353-1-416-8900