Cboe’s Henry Schwartz Discusses Options Market Growth and Future Trends at Industry Conference

ASHEVILLE, N.C. (JLN) — Henry Schwartz, Vice President and Global Head of Client Engagement, Data & Access Solutions at Cboe Global Markets, provided insights into the current state and future trends of the options market during an interview at the Options Industry Conference in Asheville, NC. The interview was part of the JLN Industry Leader video series sponsored by the Options Clearing Corporation (OCC). Schwartz highlighted the robust performance of the options market, noting that trading volumes have more than doubled since 2019. “The industry is supporting a volume of about 45 million contracts per day, and we’ve handled as many as 70 million contracts on some big days earlier this year without any exchange going down or latency issues,” he said, emphasizing the market’s resilience and the quality of the trading experience for customers. A significant portion of the discussion focused on the rise of zero days to expiration (0DTE) options, which are options contracts that expire on the same day they are traded. Schwartz acknowledged the success of 0DTEs but stressed the need for more education to clear up misconceptions about their risk levels. “0DTEs are considered risky, so we have to send the message out there that we have great risk systems around them,” he explained. Schwartz also addressed the increasing number of options exchanges, with 16 currently operating and two more pending. He noted that while more exchanges increase competition and innovation, they also add complexity for liquidity providers. “All the exchanges are doing some visible activity and meeting some need in a very competitive space,” he said. Looking ahead, Schwartz mentioned several exciting developments, including extended trading hours and the quoted spread book concept, which will enable options market makers to dynamically quote complex orders. He also highlighted the potential for cross-product spreads, allowing for trading one option product against another, which could enhance market efficiency and connectivity. The Options Industry Conference, held in 2024 at the Omni Grove Park Inn, continues to be a premier event for top-level management and trading professionals, focusing on key topics such as regulatory shifts, technological advancements, and market trends in the options industry. QUESTIONS What have been some of the key option trends so far in 2024? Are you seeing any growth from hedge funds and wealth managers? 0 DTE remains around 50% of SPX trading is this sustainable? What other ways are investors using options? In what ways are traders utilizing Cboe’s tools or platforms to manage risk? Are there other developments in market structure products or technology you are excited about? How has the reorganization affected Cboe? How will a new trading floor in Florida change how the industry trades? 00:00:00 - Introduction and Exchange Overview 00:00:47 - Key Option Trends in 2024 00:01:44 - Growth from Hedge Funds and Wealth Managers 00:02:27 - Sustainability of Zero DTE in SPX Trading 00:04:21 - Other Ways Investors Use Options 00:05:20 - Utilizing CBOE's Tools and Platforms 00:06:17 - Exciting Developments in Market Structure, Products, and Technology 00:09:03 - Effects of Reorganization on CBOE 00:10:19 - Impact of New Trading Floor in Florida