Market Structure Survey

Gauging the New Normal for Volatility, Volumes, Market Levels & Retail Investor Participation

Needless to say, 2020 was a very interesting year for markets. Market trends were driven by COVID-19, a presidential election, and the rise of retail investing. Volatility and volumes in both equities and multi-listed options reached, and remain at, higher than historical levels.

Now market participants are wondering what the new normal will be as we move through 2021. As such, we thought it would be interesting to survey our equity markets and listed options trading committees, as well as representatives of U.S. equity and multi-listed options exchanges. We questioned survey respondents about where they saw 2021 market metrics heading, as well as their views on retail investor participation.

This report analyzes the results from our survey.

Key Takeaways

  • VIX expectations: High teens to low 20s range, 62.5% of responses
  • Volumes expectations: Equity ADV ~10B shares, 83.9% of responses; multi-listed options ADV high 20s to low 30sM contracts, 77.4% of responses
  • Markets expectations: Continue to expand but at a slower pace, 56.3% of responses; top risks to both the up and downside are COVID and monetary/fiscal policy, in mirror positions
  • Retail Participation expectations: equities 20-30% (84.4% of respondents), to decrease somewhat in 2021 (43.8% of respondents); options 20-30% (31.0% of respondents), to decrease somewhat in 2021 (41.9% of respondents); plus reasons retail participation grew and what it might take to maintain participation

About the Survey Structure

This survey was populated between April 16 to April 30. We had 47 respondents from 25 unique firms, with some firms filing individual business unit responses while other firms chose to respond one time on behalf of all divisions. The group of firms represented depicts key market players in equities and listed options: investment banks, market makers, retail trading firms, exchanges, etc. We estimate that the responses capture around 65–70% of both equity and options volumes.




Katie Kolchin, CFA
Director of Research