Some 60% of online options investors say they are trading more than they were 12 months ago, according to an OptionsHouse study of the characteristics and trading habits of investors and their and expectations of online options brokers.
Some 79% of traders reported that online trading is not their primary source of income, and just 10% said they find options trading stressful, the survey, “The OptionsHouse 2008 Online Options Investor Study,” found.
The survey was conducted by Chicago-based Monogram Group on behalf of OptionsHouse in Nov. 2007 among 720 options traders.
Some key findings of the survey are highlighted below.
Online options traders said they traded options for a variety of reasons:
- Â 74% said they do so for short-term gains.
- 59% said they invest in options as an alternative to buyingÂ stock.
- 34% said they trade as an investment hedge.
A profile of options investors emerged:
- 91% of options traders are men.
- 57% of options traders are between 45 and 64 years of age.
- 76% are college graduates (32% have graduate degrees).
- 60% have traded options for 5 years or less.
- 44% of traders have been with an online options firm for less than two years.
- 27% are retired.
- 56% reported a household income of greater than $100,000.
Online options traders seek core features from their brokerage firm. On a scale from 1-10 (1=not at all important and 10=very important), the following features were rated as a 9 and 10 (top 2 box):
- 84% of respondents view “real time” quotes as being very important.
- 80% reported “reliable execution” as very important.
- 69% viewed “customer service” as very important.
- 67% reported “low flat-rate pricing” as being very important.
- 60% said that “overall least expensive commissions” as being very important.
Scott Brueggeman, chief marketing officer of OptionsHouse, said the industry “needs to educate younger investors and women if it is to grow faster. There is an opportunity to expand the options investing community beyond men in their 40s and 50s.”
“These results show that an online options broker must, at the bare minimum, provide a reliable and transparent site to compete in the marketplace,” Brueggeman added. “Online features such as ‘real time data feeds’, ‘real time quotes’ and ‘strong security’ proved to be important as well as low, flat-rate pricing.”