Problem: In order to trade options, you must buy or sell a whole option contract (which grants the right to buy or sell 100 shares at a specific price on a specific date). Why are there not ways to purchase partial options contracts (the right to buy or sell less than 100 shares at a specific price on a specific date per contract)?
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Solution: A platform that allows for fractionalized options trading.
As described by Thomson Reuters,
A surge in options trading by individual investors helped lift market volumes to record highs in 2021, but it also made trading the derivatives more difficult for many institutional investors, according to a Coalition Greenwich study released on Wednesday.
Options volumes soared to a record 9.87 billion contracts last year, a 32.2% increase over 2020, which was itself a record-setting year for volumes, Options Clearing Corp data showed.
The number of individual options account holders grew to the highest levels ever last year, and the amount of smaller trades, which are indicative of retail trades, increased to significant levels of market share, said Shane Swanson, senior market structure and technology analyst at Coalition Greenwich.
The options market is growing, and as more people trade options there is bound to be people who want more strategies in flexibility. This platform would be the first in the world to enable that.
Monetization: Transaction fees or commission from serving as a market maker.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)