As Options Trading Hits Historic Highs, Nasdaq Strives to Solve for Bandwidth Obstacles
As market volatility continues, Options trading has reached historic highs. According to the Options Clearing Corporation (OCC), more than 48 million options traded on Friday, Feb. 28, setting a record for total trading volume in a single day. For perspective, 18.2M options contracts traded on February 28, 2019. OCC reports that March 2020 daily average hovered around 30 million contracts daily.
The peak daily messages in the Options Price Reporting Authority (OPRA) feed reached a record breaking high of 102B in February 2020 — more than triple that of February 2019 (31.4B).
While Exchanges and the Options SIP (OPRA) are operating extremely efficiently during this high volatility time period, this amount of data can be overwhelming for many firms to ingest. To combat this, Nasdaq launched its Nasdaq Smart Options service, which allows investors to gather curated options data feed in real-time. It supports the National Best Bid and Offer (NBBO) and Last Sale trade messages as well as administrative messages for all listed options. Individual BBO data is excluded, which significantly reduces bandwidth cost and contributes to an average savings of 80% compared to the cost of the full OPRA data feed.
"The options markets are vitally important to the financial ecosystem, but many users have not been equipped to handle the massive volume of messages from those markets," said Jeff Kimsey, Vice President of Product, Nasdaq Global Information Services. “Nasdaq Smart Options was built to overcome those obstacles.”
Smart Options provides NBBO and last sale data for U.S.-listed companies from the OPRA data feed – without the burden of ingesting multiple layers of data. For example, while OPRA peak messages hit 102B in February, Smart Options peak daily messages high was a fraction of that at only 20B.
Nasdaq Smart Options is designed to be especially beneficial to those facing financial or bandwidth limitations in regards to consuming the full OPRA data feed. Smart Options aligns with Nasdaq's goal of increasing market access and transparency for global investors
Visit this page to learn more about Nasdaq Smart Options.