Exchange Highlights

Kicking off 2025 with strong equity and options volume

Feb 11, 2025

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Strong Volume in January; One-Cent Tick Size Hurts Exchange Competitiveness

Highlights & Recent Developments

  • Equity consolidated average daily volume was 15.4 billion in January 2025, up 34% year-over-year.
  • Off-exchange trading increased to 51.6% in January 2025, up from 44.1% in January 2024.
  • Rising retail trading and the inability of exchanges to quote more competitively in stocks that would qualify for a half cent increment contributed to higher off-exchange trading over the past year.
  • Options average daily equity contracts was 50.9 million in January 2025, up 22% year-over-year.
  • Non-penny underlyings increased to 10.8% of industry option volume in January 2025, up from 6.8% in January 2024.
  • SPY was 15.6% of industry option contracts and MEMX regular electronic market share was 5.9%.

Equities Exchange Highlights

In January, consolidated industry volume increased by 34% year-over-year to 15.4 billion average daily shares. Higher retail activity in sub-$1 stocks and pre-market activity contributed to volume growth. Sub-$1 activity accounted for 17.0% of industry volume in January 2025, compared to 14.5% in January 2024. Additionally, pre-market activity increased to 6.2% of industry volume, up from 3.5% in January 2024.

Total off-exchange trading increased to 51.6% in January 2025, up from 44.1% in January 2024 (see blue line below). We analyzed volume in three segments and observed the following:

  • Sub-$1 stocks: In January 2025, sub-$1 stocks accounted for 17.0% of industry volume. Off-exchange market share in this segment rose from 55.1% in January 2024 to 59.9% in January 2025 (yellow line in Fig. 2).
  • Tick change stocks over $1: These securities have a quoted spread ≤ $0.015. In January 2025, they accounted for 51.3% of industry volume. Off-exchange market share in this segment increased from 41.0% in January 2024 to 51.6% in January 2025 (light blue line in Fig. 2).
  • Other securities over $1: In January 2025, these securities made up 31.7% of industry volume. Off-exchange market share in this segment grew from 45.4% in January 2024 to 47.1% in January 2025 (green line in Fig. 2).

In summary, off-exchange share increased across all three segments, with the most significant contributor being the rise in off-exchange activity in tick change stocks, which account for over half of industry volume.

The SEC’s rule to lower the tick size from 1 cent to ½ cent for securities with a quoted spread ≤ $0.015 should remain a policy priority. This rule will enable exchanges to quote more competitively, contributing to narrower spreads and lower trading costs for investors.

Options Exchange Highlights

Options contract volume increased to 50.9 million average daily contracts, up 22% year-over-year. Non-penny underlyings increased to 10.8% of industry volume in January 2025, up from 6.8% in January 2024.

SPY was 15.6% of industry contracts, followed by NVDA at 8.8% and QQQ at 7.8%. MEMX regular electronic market share in these symbols was 5.9%, 5.2% and 5.7%, respectively.

MEMX regular electronic market share was well over 10%+ in five out of the top 10 non-penny underlyings in January 2025.

1 Regular electronic market share includes continuous trading in single-leg options (excludes auctions, floor, and complex trades