The Guide to US Options Market Data
What you need to know to navigate the US options market—
and how it affects your market data infrastructure needs
At first glance, US options market data may seem like a cost-efficient alternative to the high stakes of low-latency trading in US equities. However, there’s more to market data buying decisions than simply the cost of feeds. The Guide to US Options Market Data explains this unique asset class and how the structure of the options market may influence your firm’s infrastructure decisions.
Understanding Options Liquidity and Open Interest
Regardless of asset class, the key to a successful market position is finding liquidity. It’s even more pivotal in options, thanks to their lower trading volume than equities, as well as instrument fragmentation and hedging practices.
The Guide to US Options Market Data looks at how options trading volume is distributed and how market conditions influence the hunt for liquidity. We look at how two key data points available from Level 1 market data feeds—trading volume and open interest—are key to navigating options liquidity cost effectively.
Consolidated Options Data via OPRA
While sophisticated options trading strategies may require access to direct feeds, many firms will find that the Options Price Reporting Authority (OPRA) consolidated feed is the most cost-effective choice for their needs. In addition to price, firms also must consider other factors, including latency, market depth, and their use of complex orders. The Guide to US Options Market Data address all these decisions.
The Hidden Cost of Options
When considering the cost of options market data, exchange fees are only half the picture. Options generate a much higher volume of data, because of the structure of the asset. Firms must plan their infrastructure around this reality.
Our guide leverages Exegy’s years of experience in the options market data space to help your firm consider all the important decisions. Armed with this guide, firms will be able to better translate their strategies into technical requirements and vet market providers for their optimal trading infrastructure solution.
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