CME S&P 500 Wednesday Weekly Options reaches new volume record


CME Group Inc (NASDAQ:CME) just announced a new record breaker today with Wednesday Weekly S&P 500 Options achieving a new daily record.

Wednesday Weekly S&P Options reached a new volume record of 128,060 contracts yesterday…Monday, November 7th. The previous record came just the prior business day on Friday, November 4th. This is the first time these contracts have surpassed the 100k barrier (see graph above).

The increase in volatility can be tied to the run-up to the U.S. elections being held today, where market volatility is always expected to increase as citizens in the largest and most dynamic economy in the world will pick a new President. Of course, this year volatility has some extra juice added with the race being so close.

Read below for more details on Wednesday Weekly Options on S&P 500 and E-mini S&P 500 futures:

Launched on September 26, 2016, with expiration on the Wednesday each week, the options provide additional flexibility for participants to tailor their market exposure based on anticipated and potentially market-moving events. Wednesday options are structured in the now tried-and-true design of the Weekly and End-of-Month equity index options – European-style exercise, with the automatic exercise of the options determined versus the 3:00 p.m. CT E-mini S&P 500 futures fixing calculation.

In-the-money options are exercised into the nearest expiring index futures contract; contrarian instructions are not allowed for these options.  As such, both long and short participants know their position post-options expiry immediately after 3:00 p.m. CT on the expiring Wednesday, which is particularly helpful since the options expire midweek and the underlying futures continues to trade. There is no need for short options position holders to wait for options assignment reports to ascertain their futures position prior to the next trade date.

Two consecutive Wednesday options are listed for trading. With this addition, there will be at least two options expirations each week: Wednesday and Friday, with the possible additional expiration of the month-end day within the same week. The addition of the Wednesday expiration makes it possible to structure trades more precisely.

For example, some important earnings announcement as well as FOMC meetings may occur in the first half of the week, while Non-farm payroll and other important statistics are released in the second half of the week. Wednesday options allow traders to take advantage of the nuances of the information flow within a week more precisely. Relative value can be better exposed between options of successive expirations. The additional set of instruments also allows hedgers to fine-tune their Greek-letter exposure with more granularity.

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CME S&P 500 Wednesday Weekly Options reaches new volume record

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