Nasdaq Rolls out Nasdaq-100 Micro Index Options

Fazzaco learned that Nasdaq was rolling out options on the Nasdaq-100 Micro Index .XND in order to provide retail investors with exposure to the popular Nasdaq 100 Index.

Nasdaq said that retail investors have entered the securities markets in droves over the past year as large retail brokers have dropped trading commissions, coronavirus lockdowns forced people to work from home, and as "meme stocks," like GameStop Corp GME.N and AMC Entertainment AMC.N, soared in value in January.

Head of U.S. options for Nasdaq, Greg Ferrari, said: "Option investor engagement is at an important inflection point, with newer participants embracing the options market like never before." 

The Nasdaq-100 Micro Index was launched in January and is 1/100th the size the Nasdaq 100 Index .NDX, which includes 100 of the largest non-financial companies listed by Nasdaq based on market capitalization. Invesco's QQQ exchange-traded fund is linked to the index.

Nasdaq said on Wednesday its first-quarter indexing revenues rose 40% year-over-year to $29 million, driven in part by higher licensing revenues from futures trading linked to the tech-heavy Nasdaq-100 Index.

Investors use options to hedge risk, enhance returns, and speculate on market direction.

New York-based Nasdaq said the new options contracts will be available for monthly expirations, with weekly expirations set to launch in late May.

The Nasdaq 100 Index closed up 0.91% at $13,935.15 on Wednesday, while the Nasdaq-100 Micro Index closed up the same amount at $139.35.

Earlier this month, Fazzaco reported that Nasdaq has posted monthly volumes for March 2021 as well as quarterly volumes for the quarter ended March 31, 2021​, with the exchange operator seeing an uptick across equities, fixed income and commodities.