I'm afraid that's incorrect; 1973 was when the CBOE started to provide exchange-traded options for the US market. Before that - since shortly after the opening of the NYSE in 1791 - they were traded "over the counter", i.e., by individual brokers matching buyers and sellers (and later, by the Put and Call Brokers and Dealers Association.) Contrary to popular belief, Black, Scholes, and Merton didn't "invent" options trading, or even come up with the way to price them; that's been around at least since the 1600s. Active and vigorous options markets were operating in London, New York, Paris, and several other European exchanges in the late 1800s and early 1900s, and there's a number of rigorous treatments (Nelson in 1900 and Bachelier in 1904) on options pricing and hedging. Joseph de la Vega describes "opsies" trading on the Amsterdam exchange with surprising clarity in his book from the 1600s (and I have little doubt that those traders were damn quick about zeroing in on pretty good pricing for them; financial incentives make for great motivation.) P.S. Absolutely fascinating description of the political wrangling and motivations in setting up the CBOE by its founding president, Joe Sullivan: http://3197d6d14b5f19f2f440-5e13d29.../papers/2010/2019_02_08_CBOE_Joe Sullivan.pdf
Thanks BlueWater. Was aware of US history not prior Europe stuff. Meant publicly traded by normal investors. There were real estate options as long as know. I will give $10,000 if can buy this home for $400k over next 3 years type stuff. I was around when options opened on exchanges for stocks. The prices were terrible, horrific for buyers. Wonderful for floor traders. Hyper immature market. Do not know a single person that traded options before exchanges opened to public. Maybe 50 by 1980. In Market Wizards the best option trader, forget his name, related his worst trade, Kennecott Copper $25 March 1981 Calls he sold for 3/8th when it was $23, bankrupted him except his dad bailed him out. For a small amount I was other side of that trade, made a 20 bagger overnite when Std Oil bot them for $63 if recall right. I think it was Divine intervention, prayed the nite before for it to happen as a sign (10 bagger but got 20 bagger). Compared to now would say point is valid, options were tiny in the 1960s and earlier compared to now. Cheers Edit: 1/3 thru your link speed reading, very interesting stuff
How did we get to gamma squeeze? I thought weeklies are mostly traded by day traders and very short-term swing traders, especially ATM ones. Did I misunderstand the question? I assume institutions/pros very rarely would use weeklies. Am I wrong?
@zdreg's answer, and people asking for an explanation of what a gamma squeeze is. Note that I'm explicitly not agreeing or disagreeing with that being the actual cause of the volume in weeklies - I can think of several reasons for it, but I don't know which one (or what mix of those) applies. And since we don't know what ticker the OP is asking about, the question is pretty poorly defined in the first place... the reasons for GME weeklies spiking volume are surely not the same as SPY having a similar spike.