Quiver Quantitative - Nasdaq (NDAQ) is gearing up to intensify its offerings in the short-term options market, responding to surging investor interest in derivatives with swift expirations. At the recent Options Industry Conference held in Asheville, North Carolina, Nasdaq (QQQ) announced its intent to seek regulatory approval for the introduction of Monday expiry options for a variety of heavily traded commodities and Treasury-related exchange-traded funds (ETFs). This innovative move is set to encompass high-profile funds including the United States Oil Fund (NYSE:USO) (USO), SPDR Gold Shares (NYSE:GLD) (GLD), iShares Silver Trust (NYSE:SLV) (SLV), iShares 20+ Year Treasury Bond (NASDAQ:TLT) ETF (TLT), and the United States Natural Gas Fund (UNG). These options will complement the existing Wednesday and traditional Friday expiries, providing traders with increased flexibility and continuity in trading these popular ETFs.
Market Overview: -Nasdaq plans to expand short-term options trading by seeking approval for Monday expiries on commodity and Treasury ETFs. -This move builds on the surging popularity of short-duration options, particularly those expiring within a week. -Increased product availability caters to investor demand for precise risk management and intraday trading strategies.
Key Points: -Nasdaq aims to introduce Monday expiries for options on popular ETFs like USO (oil), GLD (gold), SLV (silver), TLT (long-term Treasuries), and UNG (natural gas). -This complements existing Friday and Wednesday expiries, providing investors with greater flexibility. -The initiative reflects the growing market appetite for short-dated options, offering granular control over positions.
Looking Ahead: -Regulatory approval will determine the timeline for launching Monday expiries on these commodity and Treasury ETFs. -The success of this strategy could prompt further expansion of short-term options across different asset classes. -The rise of short-dated options highlights the evolving landscape of derivatives trading, with a focus on intraday strategies and precise risk management.
The drive to introduce Monday expiries is a testament to the growing trend in the options market towards Zero Days to Expiration (0DTE) options. These options, which expire within a day of their activation, are increasingly popular across various asset classes, including major indexes like the S&P 500 and Nasdaq 100, and their corresponding ETFs, SPY (NYSE:SPY) (SPY) and QQQ. This move by Nasdaq is aimed at catering to this burgeoning demand, especially from traders who seek to capitalize on short-term market movements without the commitment of longer-duration contracts.
Sean Feeney, head of US options at Nasdaq, highlighted during his interview at the conference that adding Monday expiries enhances the array of products available to traders, facilitating more dynamic trading strategies. This development is part of a broader shift seen across exchanges globally, where there is a strategic expansion of expiry options across additional products such as the Russell 2000. Such expansions underscore the exchanges' adaptation to evolving market needs, where investors are increasingly gravitating towards high-frequency, short-term trading opportunities.
The proposed expansion of expiry options by Nasdaq represents a significant pivot towards more granular trading in the ETF and options market, signaling a shift in how investors are approaching portfolio management and risk. With regulatory approval, these changes could further energize the trading landscape, offering more precise hedging and speculative opportunities that align with the fast-paced nature of modern financial markets.
This article was originally published on Quiver Quantitative