A new record was also set for average daily volume in October at 3,185,440 contracts, breaking the previous record of 2,877,072 contracts set in March. Average daily volume in October was 51% higher than October 1999, which had an average daily volume of 2,111,601.
In addition, equity open interest reached new heights in October. On October 20, equity open interest stood at 74,923,709, which breaks the previous record set on September 15 at 66,368,066 contracts. Month-end equity open interest for October was 64,915,538 contracts, compared to 45,699,522 contracts in October 1999.
Equity open interest is the total number of options contracts not yet exercised or allowed to expire and is one indication of longer-term investing in equity options.
"October was an extremely volatile market which sparked the tremendous growth in options volume," said Paul Stevens, OIC president. "During times like this, investors can use equity options to either participate in price movements or to protect current holdings."
Year-to-date cleared contract volume for equity options is 555,059,400, an increase of 60 percent over the same time frame in 1999 with 346,106,827contracts. An equity option is the right but not the obligation to either buy or sell 100 shares of stock at a predetermined price (strike price) on or before a fixed date (expiration date).
The Options Industry Council (OIC) is a non-profit organization founded in 1992 by the nation's options exchanges to provide investor education about equity options. Today, its members include The American Stock Exchange, Chicago Board Options Exchange, Pacific Exchange, Philadelphia Stock Exchange and The Options Clearing Corporation. OIC's free educational programs include: an educational Web site at www.888options.com, evening seminars throughout the continental United States and Canada, instructional videos, educational brochures and interactive software. More information on these resources is available by visiting the Web site, calling 1-888-OPTIONS, or sending e-mail to options@theocc.com.
