rainbow bar graph

Stock Option Volume Reached New Levels in 2020



2020 Options Recap

As individual investors flooded the stock market in 2020, stock option volume exploded. Daily volume in single-stock options for the year was up 68% to 17.3 million from the 10.3 million daily average in 2019. In December that daily volume hit a record 23.4 million contracts.

A sizable portion of stock option activity in 2020 involved individual investors rather than larger institutions. Data compiled by Cboe Global Markets (CBOE) suggests that many of these investors were new to options trading, and they started out by buying or selling a single contract equivalent to 100 shares of stock. Popular stocks for options trading last year included Apple (AAPL), Tesla (TSLA), Advanced Micro Devices (AMD), NIO (NIO), and Microsoft (MSFT).

A Closer Look at Calls and Puts

Options are contracts that give holders the right, but not the obligation, to buy or sell an asset like shares of a company stock. Purchasers can exercise the option by or on a set date (depending on if they are European or American style options) and then buy or sell at a set price, while sellers have to deliver the underlying asset or cash. Investors can use options for many purposes, some common ones are if they think an asset’s price will go up or down, or to offset risk in their portfolio.

When purchased, call options give investors the right to buy an asset. Call buyers are essentially giving up some profit in exchange for the lower capital risk of not owning an asset outright, since the option premium is less than the purchase price of the underlying security.

Meanwhile, puts are options that give investors the right to sell an asset. Investors pay a premium to participate in a downward movement of an asset while the only risk is losing the premium paid.

Learn more with SoFi’s Guide to Options Trading

What Happens Next?

It is unclear whether the options boom will continue after the pandemic, as representatives from Cboe say it has largely been driven by smaller trades from individuals and could be tied to more people working from home. Homebound investors are now able to trade during the day with online brokers.

“One of the big questions I get is what happens when people go back [to the office]. Will it disappear?” said Henry Schwartz, Cboe’s Head of Product Intelligence. Schwartz suspects that while some individuals are experiencing good luck after the markets bounced back from their early-2020 slump, others have learned to manage risks and make money, and those new traders could stick around.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21010802


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender