(Bloomberg) -- Arianne Adams, former head of derivatives at Cboe Global Markets Inc., is joining retail investing platform Webull Financial LLC as the firm seeks to capitalize on growing appetite for trading options.
Adams was named chief strategy officer and head of derivatives at Webull, the company said Monday. In her new role, Adams will report to Chief Executive Officer Anthony Denier and work with other senior leaders to shape the firm’s expansion into new investing products and regions, according to executives. She starts at Webull’s New York office, in downtown Manhattan, in January.
“Retail traders have really taken to options,” Denier said in an interview. “Having someone like Arianne, with her depth of knowledge, puts Webull in the position to increase awareness of derivatives and continue our journey.”
Retail and institutional investors look to options, which give the holder the right to buy or sell a security, as a relatively cheap way to bet on stocks and hedge their exposure. Adams brings experience working at an exchange operator that expanded to offer options that expire each day of the week. Those products, known as zero days to expiration options, have lured investors at a time of growing unease, allowing them to protect against market moves resulting from a jobs report or the release of new GDP numbers. Traders also settle their position every day, instead of carrying risk overnight.
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Adams said that user experience and knowledge has helped retail investors migrate from equities to options trading.
“People have gotten educated very quickly, and investing platforms have made access very easy, to execute and express a view through a futures or options contract,” she said.
The pandemic’s day-trading frenzy changed derivatives from being only for professional traders into tools for sophisticated retail investors, with global options trading setting record after record and overtaking futures volumes in 2021. Adams said she observed unprecedented growth in the US options market while at Cboe, a role she left at the end of October.
Read More: Cboe Shakes Up Top Leadership as Arianne Adams Leaves the Firm
Retail brokerage platforms were also growing their user bases, “but they were just touching the tip of the iceberg,” she said.
Webull, which offers commission-free trading, started in 2018 as an equities-trading platform. It’s since expanded into options to become one of the top 10 retail brokerage platforms in the US. Still, on average, only 10% of Webull’s customers actively trade options as well as equities, Denier said.
“Not everyone has migrated from equities to options — there are still a lot of users to be captured,” Adams said. “We’re in early innings.”
Cboe’s VIX volatility index, which reflects how options traders are betting on swings in the S&P 500, is likely to climb in 2024 after tumbling this year to the lowest since before the pandemic struck, and the magnitude depends on the strength of the economy, JPMorgan Chase & Co. strategists said last week. The closely watched VIX, which soared as the Covid-19 outbreak upended markets and the economy, has averaged about 21 over the past five years and now stands at 12.8.
Read More: JPMorgan Sees Stocks Volatility Rise in 2024 as Risks Mount
(Updates with VIX index in last paragraph.)
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