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Jim Meade / Iowa City
Senior Advisor

Who Are The Big Options Players?

What is the major breakdown of big players in the options business?  Not so much individual players but segments such as specs, producers, processors, etc?  Percentage of involvement by segment, I guess is what I'm asking.

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3 Replies
ShelladyOptions
Senior Contributor

Re: Who Are The Big Options Players?

All of the big commercial houses obviously use options to hedge underlying risk but also have proprietary desks that take risk for the firm above and beyond hedging.

 

That means Cargill, ADM, Bunge etc. etc.

 

There are also large proprietary firms that are just trying to put capital to work. DRW, Infinium and Ronin just to name a few.

 

Just as in the futures market, the business has gotten so large that the small individual investor is a tiny fraction of the overall business. Foreign governments, prop trading firms and investment banks now make up the volume.

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Jim Meade / Iowa City
Senior Advisor

Re: Who Are The Big Options Players?

Scott,

Is there a general breakout of what percentage of the action the big players hold?  Like 25% specs, 50% commercials?  Just making up some numbers as as example. 

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ShelladyOptions
Senior Contributor

Re: Who Are The Big Options Players?

There is data that you can get from the exchange to to determine the exact percentages. I don't have a breakdown right now but on the face of it I would say the specs, prop groups and banks are at least 75% of the market. Commercials have had less and less of a market share as more fund money has poured in looking for better returns than a risky stock market or a 10 yr. Yield below 2%

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