Investors Use of Stock Option Trading on the Rise

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Stock option trading is at an all time high. Extensive research has been done covering 30 years of stock option that has found profitable stock option trading strategies. The use of stock options will likely increase in the future.

“We’ve seen a steady rise in the use of stock options by investors to maximize their leverage and returns over the past twelve months.” said Roger London, PhD a leading analyst and promoter at Quoting industry sources at a recently concluded press conference, London continued, “Chicago Board Options Exchange confirms this observation when they recently reported that the month of March was their busiest on record with volume up 55% over the same month last year. In fact all previous stock option trading records were broken when over 5.6 million stock option contracts were traded in a single day.”

Stock option trading enables investors to increase their leverage and thus their rate of return over simple stock trading. “If an investor has a solid approach to picking stocks that go up in the short term, the returns can be increased by 10 to 15 times using stock options.” London explained. “The trade off for this increased return is that the investor has to also judge the time period over which the increase will occur,” he added.

Being able to pick the stock, direction, and time period are all critical for successful stock option trading. A recent statistical analysis of over 30 years of stock data has revealed certain reoccurring patterns that can yield high returns in stock option trading. The research and discovery of these patterns is discussed at “The analysis was done with custom developed software and then the strategy was applied to all stocks for the last five years. Stock trading resulted in an average return per trade of 3.2%, but with stock option trading the average return per trade was over 55% for 2005,” London explained.

Investors have already begun to exploit the patterns found in this research and are reporting highly profitable trades. Concerned that the results will be diluted if too many investors use the research, the data is only being released to a total of 300 people. London said, “Whenever investors find inefficiencies in the market, there is a rush to take advantage of those inefficiencies. I think is a smart decision to control the dissemination of this research so that returns can be maximized.”

Although stock options are not available on all stocks, about half of the stocks found in the analysis did have tradable options. If the trend of increasing use of stock options by investors continues, we should see even more stocks add options for investors. “I can easily see that 60 to 70 percent of actively traded stocks will have option contracts available in the coming year if this trend continues,” stated London.

More information about the stock option trading research is available through

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Neal Jasper
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