Last month, the NYSE American and Arca Options Trading Floors partially reopened with reduced headcount and new safety protocols. Following this, open outcry is now back to about half of its pre-Floor closure share of total market volume. Open outcry volume appeared to be drawing volume away from Auction, Complex, and Electronic trades.
|All Floors Closed||Arca Open||American Reopens|
|Jan 1 - Mar 22||Mar 23 - May 3||May 4 - May 25||May 26 - Jun 2|
In large institutional-sized trades of 5,000 contracts or more, we saw that Auction share, which had benefitted the most from the Floor closures, declined to near pre-Floor closure levels. It appeared these large trades were directed back to the Floors, however, the overall volume of large trades has not recovered to pre-closure levels.
Trade >= 5,000 Contracts
We observed that volume in trades greater than 100 contracts is at six-month lows compared to trades of 100 contracts or fewer, which are at record highs. This is indicative of growth in retail volume as a proportion of industry volume that does not typically trade in open outcry.
The reopening of the NYSE Amex and Arca Options Trading Floors started a healthy migration of options trading back to open outcry. However, even at these elevated industry volume levels, large institutional-sized trades have not fully returned to the market. We anticipate continued growth in open outcry trading as these trades begin to return to the market.
Activity in NYSE’s Retail Price Improvement Program for stocks not listed on the NYSE has shown strong growth since its launch last December. Tape B activity recently peaked at more than two million shares.
To enhance visibility and understanding of the Closing Auction process, NYSE has introduced a graphical interface with a trailing three months of closing imbalance feed historical data for the 1,000 largest daily Closing Auctions.
NYSE research reviewed option usage trends to end 2022 and start 2023: 2022 options market activity was generally aligned with equity market moves. Average monthly put-call volume ratio in 2022 was higher than 2021 but declined sharply at beginning of 2023. In 2022, floor traded a higher put premium relative to call but a much lower put premium in 2023. Moreover, electronic trading saw more activity in SPY and QQQ, while floor trading saw most activity in HYG. Also, floor trading had a significantly higher put-call ratio than electronic trading for days around FOMC meetings and CPI announcements over most of this period.