The Necessity of Real-Time Options Data for Retail Participants

February 3, 2025

Access matters, especially when every second counts.

While retail participation in options markets had been on the uptick over the last 10 years, it surged during the pandemic, where listed options volume reached (then) all-time highs. The record-breaking market activity has continued since then: in 2024, a record 12.2 billion options contracts traded in the U.S., up 10.6% from 2023’s total.  That’s the fifth consecutive record year for volumes.

Data via the OCC

So, it might go without saying that the retail participation story is here to stay and will likely continue increasing with the proliferation of more retail-centric fintechs globally, alongside better investor tools that enable more informed decision-making.

One thing all retail options traders need to make those informed decisions is reliable, real-time pricing information. And broker dealers need data products to adequately provide real-time information to their customers. Cboe Global Markets (Cboe) believes that everyone should have access to cost-effective data solutions for their trading endeavors and businesses. But current interpretations of the NMS Plan governing options market data dissemination make achieving this objective more difficult than one might think, effectively creating a lack of choice for broker dealers and relegating many retail investors to delayed options pricing data. This is why Cboe proposed to amend the NMS Plan with the aim of broadening accessibility to more cost-effective real-time pricing data by enabling market participants to have more choice in the manner/type of data they receive. While that initial proposal to change the NMS Plan was disapproved on procedural grounds, we remain hopeful that our pending appeal of the current interpretation will move the issue forward. We were especially encouraged to see so many in the retail brokerage community submit comment letters in support of our proposal.

How Did We Get Here?

As background, the Options Price Reporting Authority (OPRA) is a securities information processor that collects, consolidates and disseminates options trading data. The Liability Company Agreement of Options Price Reporting Authority, LLC (the “OPRA Plan”) governs the process by which options market data is collected from OPRA Plan participant exchanges, consolidated, and then disseminated. OPRA Plan participant exchanges – each U.S. national securities exchange that is approved to provide markets for the listing and trading of exchange-traded options – provide messages to OPRA about each trade executed as well as each price change quoted on a member exchange, the latter being the vast majority of messages reported to OPRA.

For Q3 2024, OPRA reported peak message volume per second of 44.8 million messages. That data point helps explain why OPRA is the largest market data feed on the planet. The massive amount of data that OPRA disseminates as part of the consolidated feed creates increased technical infrastructure requirements and costs to directly consume such data due to its sheer volume and update frequency. OPRA itself acknowledged the growth in message volumes by doubling the number of multicast lines it deploys to disseminate the feed from 48 to 96 lines. Since then, infrastructure demands have only further increased.

Source: OPRA

Furthermore, when considering the dissemination of the data downstream to individual users, a streaming service becomes even more expensive, with retail brokers instead relying on queries of the OPRA data by the individual user to provide them with a snapshot of the current price.

In 2001, the Securities and Exchange Commission (SEC) approved changes to the OPRA Plan to allow exchanges, under certain conditions, to provide proprietary options data to their members. Before this amendment, OPRA was the only provider of information regarding options quotes and executed trades. That amendment was further expanded in scope in 2003 to include other “persons” that aren’t exchange members.

The key condition allowing proprietary options data consumption was that members have “equivalent access” to OPRA’s consolidated options information and an exchange’s proprietary data on the same terminal or workstation.  

Understanding Equivalent Access

We believe the language in the OPRA agreements and public representations made by other OPRA members since the 2001 adoption of the amendment support our view that this equivalent access provision can be satisfied if a data recipient maintains either a streaming subscription to the OPRA feed or by having the ability to query OPRA data on a usage-basis. However, nearly two years ago, other OPRA members challenged that view and asserted that the equivalent access provision was only satisfied if a proprietary data recipient also maintains a streaming subscription for the full OPRA feed, and not if they only have the ability to query OPRA data on a usage-basis.

Why does this seemingly small difference in language matter? Receiving OPRA data via a streaming subscription to the full OPRA feed in most circumstances will cost more than receiving the data on a per-query basis. This is true especially when market participants are providing OPRA data to individual retail investors who are more likely to be low volume users of such data. As such, cost can be a significant barrier for market participants looking to best serve retail investors.

Further, it can also make any proprietary data feed seem unnecessary if a user is forced to consume the full OPRA feed. Moreover, there are many market participants who, for their trading practices, do not need that firehose of information and would prefer alternatives. We believe this undermines the objective that supported the adoption of the equivalent access provision: to improve competition.

In addition, if there are no alternatives to the OPRA feed, and the cost of obtaining the data is prohibitively high to disseminate to the individual user, market participants generally default to providing delayed data to a large portion of their user base – which is less than optimal.

In volatile markets, even the slightest data delay can have consequences.

A Nvidia Case Study

There are thousands of examples of how drastically an options price can change over the course of a brief period, but let’s look at just one example using a single name favorite of options traders: Nvidia (#NVDA).  

On Thursday, November 21, 2024, NVDA stock was choppy as markets digested the earnings report the company released after market close the day prior.

For a call option that was near-the-money at market open ($145 strike) the largest price movement occurred during the fourth 15-minute time interval of the trading day with a percentage change as of -17.24% and price decreasing from $11.02 (10:15 a.m.) to $9.12 (10:30 a.m.).  

For the same strike put option ($145), the largest price movement occurred during the fourth 15-minute time interval of the trading day with a percentage change as of 24.68% and price increasing from 9.48 (10:15 a.m.) to 11.82 (10:30 a.m.). 

Any retail trader entering a market order relying on delayed data would have missed these movements, experiencing execution that would not have matched their expectations when entering the order.

A real-time quote snapshot would have provided sufficient price guidance in the above scenarios, however, reliance on snapshots of real-time quotes is a practice in place only due to the cost of disseminating OPRA data downstream to users.

Thus, we maintain the stance that the current interpretation of the OPRA Plan would unnecessarily restrict investor choice in market data products, prohibit distinct classes of investors from selecting options market data products that best suit their needs, and curb competition between providers of market data. Conversely, Cboe’s position would provide investors the ability to choose the data products that best fit their needs, promote competition between data providers, and ensure that all investors—including cost-sensitive or technologically-limited investors—enjoy effective access to both real time proprietary data streams and OPRA consolidated data fostering continued growth of options markets overall through increased accessibility and more informed participation.

1 OPRA 96-line Expansion: The Big Boost in Latency and Infrastructure Requirements | Pico

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