Robinhood is catalyzing new records in zero days to expiry options trading
Ahead of Robinhood’s earnings, I wondered if the brokerage’s recent introduction of index options was feeding the frenzy of zero days to expiry trading.
(Disclosure: Sherwood Media is an editorially independent subsidiary of Robinhood Markets Inc.)
Early evidence to that point had suggested “probably.” Thanks to new data from Cboe, we can upgrade that answer to an unequivocal “yes.”
In February, the first full month in which Robinhood offered trading in S&P 500 options, average daily volumes rose to a record 3.49 million, and 56% of that activity took place in options due to expire that same day (aka 0DTE) — also a record.
“The jump in 0DTE volumes is partly a function of higher intraday volatility, but mostly a result of expanded access with Robinhood rolling out index options trading to all its customers in late Jan,” wrote Cboe’s Mandy Xu, head of derivatives market intelligence.
Doomsayers have suggested that the plethora of 0DTE options trading could turn a molehill for the stock market into a mountain, a claim that seems a little over the top on the glass-half-empty side of the spectrum. But on a more neutral note, the popularity of these contracts can certainly have a noticeable impact on intraday trading patterns.
“Looking at annualized trading revenue, Legend is now up to $50 million and index options are up to $15 million and both are showing nice incrementality and strong week over week growth rates,” Robnihood’s chief financial officer, Jason Warnick, said on the February 12 conference call that followed the earnings release.
Early evidence to that point had suggested “probably.” Thanks to new data from Cboe, we can upgrade that answer to an unequivocal “yes.”
In February, the first full month in which Robinhood offered trading in S&P 500 options, average daily volumes rose to a record 3.49 million, and 56% of that activity took place in options due to expire that same day (aka 0DTE) — also a record.
“The jump in 0DTE volumes is partly a function of higher intraday volatility, but mostly a result of expanded access with Robinhood rolling out index options trading to all its customers in late Jan,” wrote Cboe’s Mandy Xu, head of derivatives market intelligence.
Doomsayers have suggested that the plethora of 0DTE options trading could turn a molehill for the stock market into a mountain, a claim that seems a little over the top on the glass-half-empty side of the spectrum. But on a more neutral note, the popularity of these contracts can certainly have a noticeable impact on intraday trading patterns.
“Looking at annualized trading revenue, Legend is now up to $50 million and index options are up to $15 million and both are showing nice incrementality and strong week over week growth rates,” Robnihood’s chief financial officer, Jason Warnick, said on the February 12 conference call that followed the earnings release.
