Future of Options?

.sigma

.sigma

The financial markets keep evolving, and with technology and Moore’s law, we will continue to see new financial alchemy constantly emerging.

what do you think the future is going to look like? Products? Microstructure? Regulations? Etc etc.

some ideas in my head:

1. Markets will eventually trade 24/7, this includes not only futures but equity as well.

2. Daily Option Expiration - Not only on the S&P but for all underlyings.

3. Massive liquidity. The markets will become so liquid that slippage will be almost non existent. Illiquid strikes won’t be a problem.

4. Expansion of markets. I think markets will expand and people will develop unique innovative ways to trade virtually anything. We will be able to trade water derivatives, electricity (retail), and other commodities currently not available.

5. Trading software will become amazing. If you think about it, a lot of current software (even thinkorswim, tastyworks, IB, etc) all look 2014ish. Although I think the platforms are amazing and look clean, there’s just a lot of improvement and updates that we will see.

I’ll add some more ideas laterz.

happy new year ET
 
OptionsOptionsOptions said:
  • I prefer no changes to the US option and equity markets.
  • Pre-market and after hours is what makes the option market so good. Don't fix something that's not broken.
  • Adding more option expiration days will be OK though.
More...

You bring up an interesting topic. The overnight/premarket session.

Awhile back there was a thread on ET about this. How almost all of the market movement we witness is due to the overnight/premarket session. I was blown away by that, and it made me look at the markets differently. And I agree with you, I hope markets don't become 24/7, Idk about you guys but I enjoy the weekends and letting the market digest its weekly fluctuations so you can take time to analyze and breathe for the upcoming week. This is very important.
 
.sigma said:
You bring up an interesting topic. The overnight/premarket session.

Awhile back there was a thread on ET about this. How almost all of the market movement we witness is due to the overnight/premarket session. I was blown away by that, and it made me look at the markets differently. And I agree with you, I hope markets don't become 24/7, Idk about you guys but I enjoy the weekends and letting the market digest its weekly fluctuations so you can take time to analyze and breathe for the upcoming week. This is very important.
More...

I agree re an eye-opener to realize the significance of gap volatility in s&p chart. Intraday ranges have been tight with almost no daylong strong trends.

So daily gappers and percent gainers plus low float ACY BTBT type charts are where intraday volatility is. Or for swings, great trends like PLUG FCX.

January should be interesting
 
No listing monopolies which could bring some of the index business back to the exchanges.
Other listing exchanges pay the licensing fee to the licensee.
16 exchanges with multiple economic models - SEC mandates to have exchange status you need to list every name - not every series, but increase competition and diminish fragmentation.
List and quote strategies - not just a COB, but live ammo strategies.
Kill linkage - IMHO it cost more than it's worth. Not saying kill NBBO.
Bring back capped index options.
Don't require 100% quoting of the deeps and the cheaps.
Limit MM concentration so the smaller MM firms have an incentive to restart.
Three firms are generally half the MM volume and everyone is concerned about getting run over by one of them.
License non-US exchanges to list US options.
 
.sigma said:
The financial markets keep evolving, and with technology and Moore’s law, we will continue to see new financial alchemy constantly emerging.
More...

Moore's law is a prediction about computing power. Not sure more computing power will help the world of finance.

.sigma said:
1. Markets will eventually trade 24/7, this includes not only futures but equity as well.
More...

I hope not. I like my time off without feeling compelled to check the market. 5 days a week is fine.

.sigma said:
2. Daily Option Expiration - Not only on the S&P but for all underlyings.
More...

For major indexes and ETFs, probably a good idea. I'd trade them. For the average small cap, the bid/ask on the daily expiration options would be very wide.

.sigma said:
5. Trading software will become amazing. If you think about it, a lot of current software (even thinkorswim, tastyworks, IB, etc) all look 2014ish. Although I think the platforms are amazing and look clean, there’s just a lot of improvement and updates that we will see.
More...

What feature is missing from these platforms that would help you make more money? I can't think of any. Maybe a better screener, but that's about it.

How about releasing earnings during the middle of the trading day instead of pre-market or post-market? Would that be an improvement?
 
I only trade equities and would welcome 24/7 trading as not everyone is US EST. Also I would ban fractional trading which make stock splits much less meaningful.
 
You must log in or register to reply here.
Back
Top