In the Media
Thursday, June 27th 2019
Lothian Interview: How to get people to trade options
How to get people to trade options? Start with seeing how the VIX relates with market movement. Introduce other relationships. Learn about options. Trade.
ORATS is trying to get people from the stock-only or long-short markets into trading options. They start by looking at the VIX and other options volatility relationships, such as skew and term structure, to help people understand how the market might behave in the future. By introducing these relationships, ORATS hopes to evolve its offering and get the attention of a much bigger market, the stock trading market, and get them using options.
We talked to people here at the Options Industry Conference, but what we're trying to do is get people in from the stock-only or the long-short, or even private equity into trading options. Those are much larger markets.
What we do as experienced options professionals is help people new to options look at, for example, the VIX, and they say, "Okay. Well, I can see how the VIX moves when the market was having trouble." This is a good way to get people thinking about options
But at ORATS, we are introducing people to other types of options volatility relationships. Be they skew relationships, or term structure relationships, we look at the how these relationships affect how the market might behave in the future.
This is a big way, not only to evolve our offering at ORATS, but also to get the attention of a much bigger market, the stock trading market, and get them using options. The first step to get them trading options is to see the information as maybe a technical indicator for their own trading. Then they start to learn about options and then they start to trade. That's where I think the evolution's going, at least for us.
Matt Amberson of ORATS joins Wall Street Horizon's Data Minds panel: Event-driven investing is all about finding a catalyst that can impact the price of an equity.