January 2025 Equity Insights

In 2024, growth in the U.S. equity markets was largely propelled by the technology sector. Post-election, the markets entered a period of transition, marked by uncertainties around the priorities of Trump's agenda. The initial post-election rally, reminiscent of 2016, quickly lost momentum. The Presidential inauguration week, however, saw the strongest performance since Reagan's era, but it remains to be seen if the market upswing will continue.

Specifically, we have seen considerable rotation between equity indices and sectors, evident by the growing interest in Russell 2000 and S&P 500 Equal Weight indices, and some significant pullbacks in Nasdaq-100 and S&P 500, which have outperformed other U.S. and global benchmark indices for the last 18 months.

The 2024 growth in Sector futures is driven by increased participation in the real estate, utilities and communications sectors. Adjacent market analysis shows Sector futures in aggregate have recently hit 22% of the ecosystem’s volumes. 

• 2024 average daily volume (ADV) reached a record of 21K contracts, +13% vs 2023.
• Open interest (OI) reached a record high of 405,410 on December 17 across 19 sectors, surpassing the previous OI high of 370,370 from December 2023.

On October 28, we launched seven new Sector options on futures to join our suite of 19 liquid Sector futures, enabling market participants to capture exposure to leading Equity sectors.

Over 822K contracts have been traded via this functionality since launch across the various Sector products, with single trades up to $1B notional being executed. The market has embraced the derived block functionality on Sector futures, which has facilitated greater intraday liquidity.

To provide greater access to derived block trading, the functionality has recently been expanded to all U.S. Equity blockable futures (excluding R2K and S&P MidCap 400).

Equity Index options ADV exceeded a record 1.6M contracts, up 11% vs. 2023, with record average OI of 6.9M contracts. Traders continued to embrace the liquidity and flexibility of the suite, which includes recently launched S&P 500 Dividend options, Bloomberg Commodity Index (BCOM) options and Sector options in 2024.

• E-mini S&P 500 options reached a record ADV of 1.5M contracts in 2024 (9% vs 2023).
• E-mini Nasdaq-100 options record ADV surpassed 83K contracts in 2024 (+28% vs. 2023).
• E-mini Russell 2000 options reached a record ADV of 17K contracts in 2024 (+102% vs 2023).

Traders have embraced the transition from open outcry Index option trading to privately negotiated options blocks. 

• Equity options blocks ADV traded 131K contracts in 2024 (+35% vs. 2023).
• Nearly 81M E-mini S&P 500 options have traded via blocks since launch three years ago.
• E-mini Nasdaq-100 (NQ) options blocks have traded over 298K contracts since launch.