- New CFTC-regulated options on futures will physically
settle into front-month Cboe Volatility Index (VIX) Futures
- Designed to offer market participants the ability to more
granularly manage volatility
- Further expansion of Cboe's volatility complex following launch
of Cboe S&P 500 Variance (VA) futures
CHICAGO, Oct. 9, 2024
/PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), the world's
leading derivatives and securities exchange network, today
announced its new Options on Cboe Volatility Index (VIX) Futures
(Ticker: UX) are planned to begin trading on Cboe Futures Exchange,
LLC (CFE) on Monday, October 14.
The new Options on VIX Futures will provide investors an
additional tool to help manage U.S. equity market volatility,
complementing Cboe's existing securities-based VIX Index options,
which are designed to provide similar risk management and yield
enhancement capabilities. Utilizing an option-on-future structure,
the new product may allow more market participants, including those
restricted from accessing securities-based options, to trade a VIX
options product.
Cboe's VIX Index options have seen record trading volumes during
the last two years, with average daily volumes reaching over
851,000 contracts in 2024, up approximately 60% from 2022, as more
investors have sought utility the options offer.
"Investors have long utilized VIX options and VIX futures to
help hedge and manage volatility exposure, and Cboe is proud to
expand our volatility product suite at such a critical time," said
Catherine Clay, Global Head of
Derivatives at Cboe. "With its options-on-futures structure, the
new Options on VIX Futures will look to meet growing customer
demand as Cboe works to provide an efficient and seamless
experience to both existing and new CFE market participants. The
launch will complement our existing volatility offerings, including
the recently launched Cboe S&P 500 Variance futures, and enable
more investors with the ability to help manage volatility and risk
through the election season and beyond."
"20 years after Cboe launched VIX futures, followed by VIX
options, and helped establish volatility as an asset class, we
continue to prioritize product innovation, engage with our
customers and bring new exchange-traded volatility derivatives to
market," said Rob Hocking, Head of
Product Innovation at Cboe. "We believe there is a strong demand
for risk management tools, especially as investors prepare for the
upcoming election and the recent change in the Fed's monetary
policy. We've seen a shift in how investors are using options on a
day-to-day basis, and with Options on VIX Futures having a
mid-curve structure and the ability to offer short-term exposure,
investors are expected to be able to manage short-term volatility
with greater precision."
Christine Hansen, CEO at IMC US,
said: "We are proud to support the expansion of listed volatility
offerings from Cboe to meet the varying needs of investors"
Tom Chlada, Chief Operating
Officer at Prime Trading, said: "Prime's investment philosophy is
to protect and grow capital, and Cboe's new Options on VIX Futures
will be a very welcomed addition to our toolkit, enabling us to
better express views on volatility and fine-tune our risk
management approach. We believe the new options will help boost
participation and trading opportunities in the volatility space,
and we look forward to incorporating this tool in our
portfolios."
Keith DeCarlucci, Chief
Investment Officer at Melqart KEAL Macro Fund, said: "VIX futures
and options play an important role when managing portfolios, and we
welcome Cboe's further expansion of its exchange-traded volatility
tools with Options on VIX Futures. Combined with the recent
variance futures launch, we have two new products to leverage."
Options on VIX futures will have European-style exercise, P.M.
settlement and physically settle into front-month VIX future. At
launch, CFE will list contract expirations for every day the week
of October 21 with two additional
Friday expirations. Each weekday beginning October 21, CFE plans to list a new contract for
trading expiring on the same weekday in the week or weeks
following.
The contracts will be regulated by the Commodity Futures Trading
Commission (CFTC) and cleared by The Options Clearing Corporation
(OCC).
The upcoming launch of Options on VIX Futures follows the recent
launch of Cboe S&P 500 Variance (VA) futures, which are
designed to offer a streamlined approach to trading the spread
between implied and realized volatility. Both products add to
Cboe's existing volatility suite and provide investors with
exchange-traded solutions to manage market volatility ahead of and
following the U.S. election.
On Friday, October 11 at
8:30 am ET, Cboe will be hosting a
webinar with speakers from Allspring Global, IMC Financial Markets,
and Golden Horse Fund Management on how Options on VIX Futures can
enhance trading ease and accessibility. To register for the
webinar, please click here. For more information about Options
on VIX Futures, visit: Options on Cboe Volatility
Index® Futures.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading
derivatives and securities exchange network, delivers cutting-edge
trading, clearing and investment solutions to people around the
world. Cboe provides trading solutions and products in multiple
asset classes, including equities, derivatives and FX across
North America, Europe and Asia
Pacific. Above all, we are committed to building a trusted,
inclusive global marketplace that enables people to pursue a
sustainable financial future. To learn more about the Exchange for
the World Stage, visit www.cboe.com.
Cboe Media Contacts
|
|
Cboe Analyst Contact
|
Angela Tu
|
Tim Cave
|
|
Kenneth Hill, CFA
|
|
+1-646-856-8734
|
+44 (0)
7593-506-719
|
|
+1-312-786-7559
|
|
atu@cboe.com
|
tcave@cboe.com
|
|
khill@cboe.com
|
|
CBOE-C
CBOE-OE
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respectively the Risk Disclosure Statement Referenced in
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SOURCE Cboe Global Markets, Inc.