Cboe Global Markets Sees Continued Growth in 2022

Adam Inzirillo, Head of North American Equities at Cboe Global Markets, sees continued growth in options and equities in the coming year. A lot of the new trends and themes that we saw emerge in 2020 around the rise of the retail investor continued strongly into 2021. Significantly, in the first quarter of 2021, we witnessed record trading volumes and record messaging in both equities and options, much of which was driven by retail investors. We see investors becoming more sophisticated and engaging in day-trading activities and deploying capital into more complex strategies as they continue to expand their knowledge base and portfolios. At Cboe, we have been closely examining the growth of retail trading in our markets. In our latest analysis, we noticed a direct correlation between the mention of stock names on chat channels such as Reddit and an increase in the trading volumes of those names in both U.S. equities and options. It was not uncommon to see some singular stock names accounting for 10% of the Total Composite Volume (TCV) on some days. Our study also showed the top 15 meme stock names being mentioned on chat forums could then account for 20% of TCV. Many of these names can trade greater than 50% off-exchange, which has increased the total percentage of market trading off the displayed markets.  Cboe continued to push into new asset classes and geographies this year, including further expanding its presence in Canada with its agreement to acquire NEO Exchange. Cboe already operates MATCHNow in Canada, and NEO is the next step for us to build out a comprehensive Canadian equities platform. We expect more market participants will also move into other asset classes such as crypto and Cboe is working to address this demand through its planned acquisition of ErisX and the creation of Cboe Digital, which will ultimately bring the benefits, structure and transparency of traditional markets to the digital asset space. We expect there will also be continued dialogue around the functioning of equity market structure.