Here's why floor-based options trading is still holding on

Trader on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

The CME's announcement that it is closing several futures trading pits at the CME and the NYMEX is certainly another signpost for the passing of floor-based (open outcry) trading.

However, floor-based options trading continues to hold on, for a simple reason: it's often much more complicated than mere futures trading.

At the New York Stock Exchange, a new trading floor just opened several weeks ago, consisting largely of the options business of the American Stock Exchange (Amex) and Arca. They trade equities options, including major equities like Apple and Google, but also Russell 2000 index options and ETFs.

It's still a vibrant floor: in 2014, nearly 27 percent of the total volume in Amex and Arca options was derived from open outcry trading.

Floor-based options trading is a bit more vital than floor-based futures trading because they are running a more complicated business. They often involve multiple legs: buy this put, sell this call, and floor brokers add a lot of value by executing these complicated trades. And, if something goes wrong, there's also the prospect that the broker can make them whole.

And the deals are usually big: at the NYSE, the average trade size is 2,000 contracts. Since each contract is 100 shares, that's 200,000 shares in an average trade size, with a notional value in the hundreds of thousands of dollars.

Futures traders, by contrast, often just buy and sell single contracts.

Of course, options can be traded electronically, particularly if the deal is simple enough. If someone is going to do a simple trade--three calls on Apple, for example, that could be handled easily electronically.

But for complex trades, there is still a market for floor trading.