The Wall Street Casino - Sunday Roundup, December 3, 2023

The flurry of zero-days-to-expiration options coming to the market sparked widespread chatter about whether it’s an investment or a form of gambling (and stoked fears of volmageddon 2.0). But their popularity continues to be solidified as a legitimate investment tool. We’ve covered numerous stories about institutions paying closer attention to the daily trading instruments, both in the U.S. and more recently in Europe (which the European Central Bank expressed concern about in the Financial Stability Review, November 2023). And now banks are also getting in on the action and incorporating daily options in their quantitative investment strategies, in a move they say could boost returns and improve downside protection.