Good morning, tradersā¦
Ben here.
I think every great trader needs to harness three attributes: knowledge, execution, and lack of greedā¦
And a crucial part of the āknowledge componentā is knowing your history.
Yesterday, I went through the first half of options trading history. If you missed it, you can read Part I right here.
Now that youāre caught up, letās jump back in our time machine and break down Part II of the complete history of options tradingā¦
A Timeline of Major Events in Options Trading
May 1973
When we left off yesterday, the Chicago Board Options Exchange (CBOE) had just opened.
Around the same time, mathematicians Fischer Black and Myron Scholes introduced the Black-Scholes Formula, which changed how stock options were priced foreverā¦
Their formula considered the stockās price, its volatility, the option’s exercise price, the option’s maturity, and the interest rate.
You may be dealing with the Black-Scholes Formula without even knowing itā¦
This formula still helps determine options prices today.
1982-1985
In 1982, the first online trading platform, NAICO-NET, was launched. But it was clunky and expensiveā¦
In 1985, Trade*Plus emerged as the first user-friendly platform. This later became E-Trade, still a major player in the online trading world.
These platforms made trading more accessible to retail traders, increasing the number and speed of transactions.
Today, nearly every trade in the market is executed via online trading platforms.
1990s
The rise of the internet and better technology changed options trading even moreā¦
Electronic trading platforms became more advanced, offering real-time data and analysis tools that helped traders execute complex strategies more effectively.
This made the market more efficient and led to new trading strategies.
The early internet also saw the beginning of online trading chat rooms, paving the way for the entire future of trading education.
Daily Strike Alliance wouldnāt be around if it wasnāt for what occurred online in the 1990s.
2008
The financial crisis of 2008 had a massive negative impact on the entire global economy, and options trading was affected as wellā¦
The uncertainty during this time led to a surge in options trading as investors tried to protect themselves from risks.
In response, regulators introduced new rules to make markets more transparent and reduce risks.
This crisis highlighted the importance of risk management and the critical role of options in protecting against market downturns.
2020
The COVID-19 pandemic shut the world inside, leading to a frenzy of people opening brokerage accounts.
Global options volume skyrocketed in 2020 as people got bored being quarantined at home and started trading options:
January 2021
As mentioned earlier, Redditās r/WallStreetBets forum caused a trading frenzy around GME.
Traders used call options to create a gamma squeeze, making the stock’s short squeeze even more intense via the use of call options.
For arguably the first time in history, retail traders beat Wall Streetā¦
This event showed the power of options trading and changed how people view the market.
It also showed the influence of retail traders using social media, proving you donāt need to work on Wall Street to crush hedge funds.
Present Day
Options trading is more popular today than it ever has been before.
High-frequency trading, algorithmic trading, and artificial intelligence are shaping the future of options markets.
But most importantly, retail traders have access to data theyāve never had beforeā¦
More educational resources and tools have made options trading more accessible to everyone, opening the door for higher options trading volume than any other period in history.
Iāve said it before and Iāll say it againā¦
This is the best time in history to be an options trader.
Now, before we go, letās look at:
š°The Biggest Smart-Money Bets of the Dayš°
- $3.4 million bullish bet on AMD 07/19/2024 $185 calls @ $3.80 avg. (seen on 5/23)
- $3.13 million bullish bet on GLD 06/21/2024 $220 calls @ $3.10 avg. (seen on 5/23)
- $1.55 million bearish bet on UBER 07/19/2024 $60 puts @ $1.18 avg. (seen on 5/23)
P.S. If you want access to more āsmart moneyā sweeps (like the one that led to my recent 250% win on KDP)…*
Thereās no better place to start than in our Spyder Webinars.
TODAY, May 24 at 12:00 p.m. EST ā my colleague Danny Phee is hosting an urgent LIVE WEBINAR where heāll reveal the MOST PROMISING āsmart moneyā setups weāre seeing this week.
Donāt miss out ā CLICK HERE NOW TO RESERVE YOUR SEAT.
*Past performance does not indicate future results
