Options were once the stuff of Wall Street firms, hedge funds, specialists and very savvy investors. Like other derivative products, there was some mystery about them -- enough that the small investor were wary of them. Not anymore. In fact, there's been an explosion in options trading and there are plenty of reasons why.
Here's what some of the experts say:
Jon Najarian - Optionmonster.com
Jon Najarian, co-founder of Optionmonster.com, talks with CNBC's "Squawk Box" about some of his latest picks. Among them: hotel stocks Starwood Hotels, Wyndham Worldwide and Marriott International as well as data storage provider Rackable Systems.
According to Najarian, investors appear to be scaling up their position in the hotel sector. Although he suspects some of the activity is based on speculation about M&A activity, he thinks there could be other catalysts driving the stocks higher.
Najarian also revisits his recent pick Cleveland-Cliffs, an iron ore company.
Andrew Wilkinson - Interactive Brokers
Andrew Wilkinson, a senior market analyst at Interactive Brokers, sees several behind the dramatic increase in the volume of options trading.
According to Wilkinson, increased media coverage, a better understanding of options and an increased use by hedge funds are among the key drivers of growing volume. Other factors include: reduced transaction costs, a greater use of electronic trading, and increased liquidity.
Wilkinson also discusses his forecast for increased volatility this summer.
"I've seen a couple of trades in July and November (options contracts) that tell us that investors are positioning for greater volatility," he says.
Mohammed Hadi - Dow Jones Newswires
Options traders are speculating that Amazon.com is planning acquire Neflix , says Dow Jones Newswires options reporter Mohammed Hadi. Hadi warns it's an old rumor that has circulated before.
"There's not any credible reason to believe it," Hadi says, "other than the market seems to love it.
Hadi also talks about a puzzling spike in trading in options of Advanced Micro .
