On Tuesday, TABB Group released a new 13-page research report called,??US Retail Options Trading: It Doesn?t Get Any Better Than This.? It disclosed that U.S. retail investors are increasing their use of?listed options as a strategy to manage risk, for stock replacement strategies and as part of more complex strategies that have traditionally been utilized by institutional investors.?
In addition, there are investors using more sophisticated strategies via cutting-edge technology as provided by retail brokers to access the US-listed options market. This comes as TABB Group noted that?retail accounts are driving higher volumes to an average 4.1 million contracts daily, an increase of 5% from 2013.
For this new study, the?largest retail brokers and consolidators in the US options market had been interviewed.
Andy Nybo, TABB?s head of derivatives research?and author of this report, said in a press release, “Retail investors have always maintained an integral role in the US options market but in recent years they?ve ramped up their trading activity. Brokers tell us they?re seeing strong revenue gains and growing demand from retail investors who are seeking to become more intimately involved with options trading strategies.? At TABB, we expect to see strong growth in 2014 from retail investors as greater adoption and growing complexity of strategies as well as secular shifts into equity assets by retail accounts drive higher volumes.?
The study also found that retail brokers are also providing comprehensive analytical capabilities that “rival and frequently surpass functionality imbedded in platforms on institutional trading desks,” said Nybod, who added,??Retail investors are seeing falling commissions and better prices, as competition for the retail investor?s business is allowing brokers to maximize the value of the order flow.”