Options on a high
The US equity options market is having a moment. Volumes reported by the Options Clearing Corporation reached a record high in September, with 1.7 billion contracts traded. The driver for this was payment for order flow (PFOF), as tracked by our suite of visualisation tools based on Rule 606 filings. Citadel Securities, which earns net trading revenues of more than $1 billion per month on average, is paying about $100 million for options flow.
The recipients of these payments are retail brokers, led by Robinhood and Schwab, with $110 million and $76 million respectively. These brokers offer zero-cost options trading to consumers, not just in the US but increasingly in Europe and Asia. And much of that is day trading using zero days to expiry (0DTE) contracts. According to CBOE, which itself reported record volumes in the third quarter, 56% of options volume in 2025 was for contracts expiring within less than one week.
This consumer activity is about entertainment rather than investment, but the institutional community sits back and enjoys the liquidity it brings.
