The main factor for the rise in ETF options may have to do with the class of investors that ETFs are attracting. Specifically, some of the biggest SPY options traders include BlackRock (NYSE: BLK), Citigroup (NYSE: C), Goldman Sachs Group (NYSE: GS) and Citadel, according to Bloomberg. ETFs, like SPY, are capable of handling institutional-sized trades that can run in the billions of dollars.

“It becomes a domino effect. One investor sees a $2 billion trade, and that gives them confidence to do their large trade. These big trades bring out more liquidity,” Mohit Bajaj, director of ETF trading solutions at WallchBeth Capital, told Bloomberg.

The options activity may also help explain the relative liquid nature of junk bond ETFs, compared to the underlying primary markets. For instance, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) has seen over $1 billion a day in option volume over the past couple of weeks as investors turned to ETFs to hedge corporate debt exposure.

“Credit managers are increasingly using HYG options as a liquid hedge; previously they had used VIX calls and S&P 500 puts in part because HYG options were not as liquid,” Pravit Chintawongvanich, head derivatives strategist at Macro Risk Advisors,told Bloomberg. “With the HYG options market becoming more liquid, I’d expect it to be increasingly adopted as a hedge to credit positions.”

Max Chen contributed to this article.