E*TRADE Study Reveals Active Options Trading Among Millennials
May 25 2017 - 8:05AM
Business Wire
Digital prowess—coupled with a desire for
leverage and income—may correlate with elevated options trading
among Millennials
E*TRADE Financial Corporation (NASDAQ: ETFC) today announced
results from the most recent wave of StreetWise, E*TRADE’s
quarterly tracking study of experienced investors. Results show
options trading patterns vary by age:
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- Two out of five (40 percent)
Millennials surveyed trade options at least monthly, compared with
25 percent of Gen Xers, and 14 percent of Boomers.
- Investors as a whole are most likely to
use options as a way to generate income, with 36 percent of the
survey population, followed by creating leverage (27 percent),
hedging against losses (25 percent), and stock speculation (12
percent).
- Millennials, however, are the age group
most likely to use options to create leverage, with 35 percent of
the survey population, while Boomers are more likely than other
generations to use options to hedge against losses, at 31 percent
of the population.
“Millennials are digital natives,” said Steve Claussen, VP of
Trader Strategy at E*TRADE Financial. “And within this context it’s
understandable why this group may also be the most active options
traders, as today there are a great many digital tools that make
options trading easier to understand than ever before.”
Mr. Claussen observed the following additional insights about
options trading among various generations:
- Income helps in a low interest rate
environment. Amid today’s low rates, surveyed investors may be
gravitating towards options writing as an additional way to
generate returns on assets within their portfolio.
- For Millennials, more leverage means
greater firepower. Millennials starting out in the investing
world may be more likely to have less investable capital compared
to older generations. Options may provide leverage for investors
looking to gain diversified exposure to asset classes, without
needing the capital to buy the underlying security outright.
- For Boomers, hedging against losses
is part of prudent planning. With many Boomers in or near
retirement, adding protection against downturns in their nest egg
can be a part of a sustainable retirement plan.
E*TRADE aims to enhance the financial independence of traders
and investors through a powerful digital offering and professional
guidance. To learn more about E*TRADE’s trading and investing
platforms and tools, visit etrade.com.
For useful trading and investing insights from E*TRADE, follow
the company on Twitter, @ETRADE.
About the Survey
This wave of the survey was conducted from April 1 to April 10
of 2017 among an online U.S. sample of 958 self-directed active
investors who manage at least $10,000 in an online brokerage
account. The survey has a margin of error of ±3.18 percent at the
95 percent confidence level. It was fielded and administered by
Research Now. The panel is broken into thirds of active (trade more
than once a week), swing (trade less than once a week but more than
once a month), and passive (trade less than once a month). The
panel is 60 percent male and 40 percent female with an even
distribution across online brokerages, geographic regions, and age
bands.
Referenced Data
How often do you place an options trade?
AGE
TOTAL Q2’17
25–34 35–54 55+ Top two boxes
(Weekly and monthly) 26% 40% 25%
14% Weekly 9% 12% 9% 5% Monthly 17% 28% 16% 9% Semiannually
16% 19% 21% 8% Annually 5% 6% 4% 3% Less than once a year 14% 12%
12% 18% Never 39% 23% 38% 57%
Bottom two boxes (Less than once a
year and never) 53% 35%
52% 75%
Regardless of your experience with
them, which of the following ways would you find options the most
useful? AGE
TOTAL Q2’17
25–34 35–54 55+ Generate income 36% 34% 38%
37% Create leverage 27% 35% 30% 14% Hedge against losses 25% 23%
21% 31% Speculate stocks 12% 8% 11% 18%
“Millennials” defined as age 25–34 // “Gen
X” defined as age 35–54 // “Baby Boomers” defined as age
55+
About E*TRADE Financial and Important Notices
E*TRADE Financial and its subsidiaries provide financial
services including online brokerage and banking products and
services to retail customers. Securities products and services,
including options, are offered by E*TRADE Securities LLC (Member
FINRA/SIPC) and OptionsHouse (Member FINRA/SIPC/NFA). Managed
Account Solutions are offered through E*TRADE Capital Management,
LLC, a Registered Investment Adviser. Bank products and services
are offered by E*TRADE Bank, a Federal savings bank, Member FDIC,
or its subsidiaries. More information is available at
www.etrade.com.
The information provided herein is for general informational
purposes only and should not be considered investment advice. Past
performance does not guarantee future results.
Important Note: Options transactions are complex and
carry a high degree of risk. They are intended for sophisticated
investors and are not suitable for everyone. For more information,
please read the Characteristics and Risks of Standardized
Options brochure before you begin trading.
E*TRADE Financial, E*TRADE, the E*TRADE logo, and OptionsHouse
are trademarks or registered trademarks of E*TRADE Financial
Corporation. ETFC-G
© 2017 E*TRADE Financial Corporation. All rights reserved.
E*TRADE Financial Corporation and Research Now are separate
companies that are not affiliated. E*TRADE Financial Corporation
engages Research Now to program, field, and tabulate the study.
About Research Now
Research Now Group, Inc. is a global leader in digital research
data for better insights and business decisions. The company
provides world-class research data solutions that enable better
decisions and better results for its 3,000 market research,
consulting, media, and corporate clients through access to over 11
million deeply-profiled business professionals and consumers in
more than 40 countries. Research Now operates globally with
locations in the Americas, Europe, the Middle East, and
Asia-Pacific, and is recognized as the quality, scale, and customer
satisfaction leader in the market research industry. For more
information, please go to www.researchnow.com.
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