NVDA spreads, volume mix on MEMX Options, and more
Aug 7, 2024
NVDA Spread Narrows; Diverse Volume Mix on MEMX Options
Highlights & Recent Developments
- Following its stock split, NVDA’s quoted spread narrowed ~60% and the percentage of odd lot trades in the stock declined significantly
- Nine spot Ethereum ETFs began trading on July 23 with average daily notional traded of $848 million, compared to $1.71 billion in Bitcoin ETFs
- In July, MEMX Options regular electronic market share was 5.9% of total volume, including 8.6% in SPY, 5.4% in QQQ, and 7.1% in IWM
- MEMX Options data shows that Customers accounted for 35% of total volume in July, with a higher percentage of liquidity removing activity
Equities Exchange Highlights
In July, NVDA was the most active stock by notional traded. Figures 1 and 2 show the impact of NVDA’s 10-for-1 stock split on June 10th. Following the stock split, NVDA’s average quoted spread in basis points declined ~60%. In addition, the percentage of odd lot trades in NVDA immediately declined from 88.4% on June 7th to 70.8% on June 10th.
Prior to the June 10 split, NVDA’s stock price was over $1,200 and would have been eligible for the SEC’s pending round lot reform. Redefining round lot sizes in higher priced stocks would similarly reduce investor trading costs, and we hope to see this change implemented in the near future.
Nine spot Ethereum ETFs began trading on July 23. The average daily notional traded in the Ethereum ETFs was $848 million, compared to $1.71 billion in Bitcoin ETFs in July. Grayscale Ethereum Trust (ETHE) traded $415 million, followed by BlackRock’s iShares Ethereum Trust (ETHA) at $196 million, Grayscale Ethereum Mini Trust (ETH) at $86 million, and Fidelity Ethereum Fund (FETH) at $76 million. Grayscale ETHE has experienced net outflows due to its higher fee—2.50% versus competitor fees that range from 0.19% to 0.25%. To help offset outflows, Grayscale reallocated 10% of ETHE assets to its Mini ETH, which has a much lower fee of 0.15%.
The launch of the Bitcoin and Ethereum ETFs are significant developments that improve access for U.S. investors, but inflows into these products have been muted thus far. Currently, Ethereum ETFs don’t allow for staking, a missing feature that has reduced investor interest. Looking ahead, VanEck and 21Shares have filed for spot Solana ETFs.
Options Exchange Highlights
MEMX Options market share was 5.9% of regular electronic volume in July. MEMX Options market share in the largest ETFs was 8.6% in SPY, 5.4% in QQQ, and 7.1% in IWM.
MEMX Options currently has 33 members with diverse participation by trading capacity (e.g., Customer, Market Maker, Firm). For example, in July, options Customers accounted for nearly 35% of MEMX total volume with a higher percent of liquidity taking activity than liquidity adding activity.
