Our previous blogs have focused on options trading strategies, what the Greeks are, market analysis, tax implications and other relevant resources needed to help traders and investors get acquainted with using options as an instrument in their portfolios to trade smarter, manage risk, diversify and stay ahead in the market during market fluctuations. So what is happening in the market when it comes to trading US options? Let's take a look at some insights and explore the emerging trends that have been driven by market volatility, evolving investor strategies, and advancements in technology when it comes to options trading.
Tiger Brokers' Quarter 4 2024 report, US subsidiary company TradeUP reported that in the US "options trading showed explosive growth, with trading volume and the number of contracts traded increasing by 384% and 215% respectively QoQ." These figures show that traders and investors are turning to options trading more and more as an additional form of maximising their market opportunities.
In Australia, the options market is also blooming. According to Statistica in May 2024, over six million options were traded on the Australian Securities Exchange (ASX). This was above the monthly average of around 5.5 million recorded since January 2020, and an increase from the 5.18 million recorded in the previous month. This shows the growth in traders looking towards options. However, the options market in Australia is small and investors are turning to overseas markets like the US. In Australia, Tiger Brokers has seen an overall increase of 62.7% in investors trading US options on the Tiger Trade platform in 2024 compared to the same period in 2023*.
With market fluctuations impacting the way traders invest their money, a few key trends and insights have emerged, that have shaped the current state of options trading. These include the following:
A surge in options trading volume
A surge in options trading often indicates increased market speculation, hedging activity, or the anticipation of significant price movements. For traders, it can indicate greater volatility, as more traders are betting on or protecting against potential shifts in asset prices. High options volume, especially in specific strike prices or expirations, can reveal market sentiment and provide insights into future price action. Also, the increased demand for certain options can drive changes in implied volatility, affecting premiums and trading strategies.
According to the Wall Street Journal (WSJ), the options market has seen unprecedented growth, with an average of 48 million contracts traded daily in the US alone in 2024 — a 9% increase from the previous year. This marks the fifth consecutive year of record trading volumes, highlighting the market's robust expansion. Globally in 2024, data from the Options Clearing Corporation (OCC) advised that 10.2 billion options contracts had been exchanged an increase from the 10.1 billion in 2023.
In the first two months of 2025, the US options market saw significant trading volume growth, with Cboe Global Markets reporting a 24.5% year-over-year increase in multiply-listed options and a 10.1% rise in index options. Options trading volume hit a fresh record in January as nearly 1.2 billion contracts changed hands, according to data from Cboe Global Markets.
The rise of Zero-Day-to-Expiration (0DTE) options
There has been a rise in the popularity of zero-day-to-expiration (0DTE) options, which expire on the same day they are traded. In February 2025, according to Market Watch, 0DTE contracts accounted for 56% of total options activity among US investors, reflecting investors' appetite for short-term, high-risk trades amid market volatility. For the trader, short-term, high-risk trades can experience extreme fluctuations amid market volatility, often leading to both quick gains and sharp losses. This is because, options lose value faster as their expiration date nears, particularly in the last few days. This rapid depreciation can create potential opportunities for traders to capitalise on a faster premium decay, especially in volatile markets - especially during periods of heightened uncertainty, such as economic data releases, geopolitical events, or earnings reports. Asset prices can swing unpredictably, making timing crucial for traders.
While volatility increases profit potential, it also increases risk, because price movements can be erratic and difficult to predict. Leveraged positions, common in high-risk trades, may maximise both rewards and losses, which can sometimes lead to margin calls or forced liquidations. Successful traders in volatile markets often rely on advanced technical market analysis, strict risk management strategies, and carefully constructed exit plans to navigate the market unpredictability effectively. 0DTE is offered on selected securities on Tiger Trade, so traders can maximise their opportunities when they find them and take advantage of rapid movements.
An increase in retail investors and sophisticated strategies
In the US, the WSJ reported, retail investors are now representing approximately 29% of US options activity, this figure has risen from previous years. This shift has led to the adoption of more sophisticated trading strategies, such as vertical spreads, straddles, and strangles, that allow investors to navigate various market conditions effectively. You can read more on these in our blog series.
The emergence of micro and fractional options
To make options trading more accessible to everyday investors, micro E-mini options and fractional options have been introduced, offering more accessible entry points for retail traders. These instruments allow investors to engage in options trading with smaller capital requirements, providing wider access to the market. Tiger Trade does not currently offer micro and fractional options.
Extended trading hours
The rise in after-hours trading means you don’t have to wait, traders can react to market news in real-time and identify potential opportunities. This trend underscores the need for continuous market access and the ability to manage positions in a 24/7 news cycle. The Exchanges and Tiger Brokers do not currently offer 24/5 options trading, however, we do offer investors 24-hour US market trading on stocks. Our app and desktop also provide 24/7 stock market news, so investors will be equipped with the information needed to find their next opportunity when the options market opens.
The impact of market volatility on defensive stocks
Markets have been volatile lately, and increased market turbulence has made investors and traders look towards defensive positions as a way to mitigate risk in their portfolios. This can be particularly seen with Cboe Global Markets, a leader in options trading, which has emerged as a defensive stock, often outperforming traditional defensive sectors during market downturns, as has Cigna according to the third-party platform Trade View. This resilience is attributed to heightened options trading volumes during volatile periods.
Technological advancements and platform enhancements
Brokerage platforms have responded to these trends by enhancing their offerings. Tiger Trade is continuously enhancing its integrations and platform to stay in alignment with trends offering investors relevant tools, news, and information to execute their options strategies and trades as effectively as possible. These can be found on both the app and desktop versions.
Tiger Trade offer:
Free L1 real-time market data quotes for US options.
Covered call & cash-secure short put available, facilitating diverse strategies.
Conditional Orders, Attached Orders, and OCA Bracket Orders to enhance your strategic flexibility. Early exercise and do-not-exercise are also available on the app.
The US options trading landscape is continually evolving as it is influenced by market dynamics, investor behaviour, and technological advancements. As we progress through 2025, the trends mentioned above are likely to persist, offering both opportunities and challenges for traders and investors in the options market.
Tiger Trade offers investors and traders opportunities to trade US options and capture market opportunities. Visit our Options Trading page on the website to explore more opportunities. Join Tiger Trade and practice options trading with no real capital risk by using the Tiger Trade demo account. Plus, if you open an account and complete your first deposit, you'll get four $0 brokerage monthly trades on either ASX, US stock, ETFs or US options.^
*Insights and trends are based on data as of 12th March 2025. These trends and information can change and it is best advised to speak to a finance professional or seek further information.
^New clients & unfunded existing clients only. Only min. brokerage waived for 4 ASX, US stocks or ETFs or options trades. Third-party fees and other fees still apply. See T&Cs for details.
Capital at risk. Options trading carries a high level of risk and may not be suitable for all investors. You should only trade with money you can afford to lose. See FSG, PDS, TMD and T&Cs via our website before trading. Information provided may contain general advice without taking into account your objectives, financial situations or needs. Past performance is no guarantee of future results. Graphics and charts are for illustrative purposes only. Tiger Brokers (AU) Pty Limited. ABN 12 007 268 386 AFSL 300767
