FOR IMMEDIATE RELEASE
CBOE TO LAUNCH NEW OPTIONS ON TWO VOLATILITY-RELATED EXCHANGE TRADED NOTES:
The iPath S&P 500 VIX Short-Term Futures Index ETN (VXX) and the iPath S&P 500 VIX Mid-Term Futures Index ETN (VXZ)
CHICAGO, IL, May 27, 2010 - The Chicago Board Options Exchange (CBOE) today announced it will begin trading options on the iPath® S&P 500® VIX® Short-Term Futures Index ETN (ticker symbol - VXX) and options on the iPath® S&P 500® VIX® Mid-Term Futures Index ETN (ticker symbol - VXZ) on Friday, May 28, 2010.
VXX is an exchange-traded note (“ETN”) based on the S&P 500 VIX Short-Term Futures™ Index, which is designed to provide access to equity market volatility through CBOE Volatility Index® (VIX) futures. Specifically, the S&P 500 VIX Short-Term Futures™ Index offers exposure to a daily rolling long position in the first and second month of VIX futures contracts and reflects the implied volatility of the S&P 500® Index one month later. The index futures roll continuously throughout each month from the first month of the VIX futures contract into the second month of the contract.
The VXZ ETN is based on the S&P 500 VIX Mid-Term Futures™ Index, which is designed to provide access to equity market volatility through CBOE Volatility Index® (VIX) futures. Specifically, the S&P 500 VIX Mid-Term Futures Index offers exposure to a daily rolling long position in the fourth, fifth, sixth and seventh month VIX futures contracts and reflects the implied volatility of the S&P 500 Index five months later. The Index futures roll continuously throughout each month from the fourth month VIX futures contract into the seventh month VIX futures contract.
The CBOE Volatility Index is based on real-time prices of options on the S&P 500 Index (ticker symbol - SPX), listed on the Chicago Board Options Exchange, and is designed to reflect investors' consensus view of future (30-day) expected stock market volatility. VIX futures, traded at the CBOE Futures Exchange (CFE), provide a pure play on implied volatility independent of the direction and level of stock prices and are increasingly used to hedge equity returns, to diversify portfolios, and to spread implied against realized volatility.
“The addition of VXX and VXZ options represents yet another dimension to CBOE's growing suite of Volatility related products,” said William J. Brodsky, CBOE Chairman and CEO. “We are especially pleased to introduce new Volatility products that will key off of CFE's VIX futures.”
CBOE also announced that Barclays Capital will be the off-floor Designated Primary Market Maker (DPM) and that Group One Trading, LP will be the on-floor Lead Market Maker (LMM) for VXX and VXZ options.
CBOE will initially list VXX options with $1 strikes ranging from 10 - 45, and VXZ options in $1 strikes from 75 - 105. VXX and VXZ options will trade on the March expiration cycle, with initial expirations in June, July, September and December. Additional information may be found at www.cboe.com/VXX and www.cboe.com/VXZ.
Chicago Board Options Exchange (CBOE), the largest U.S. options exchange and creator of listed options, continues to set the bar for options trading through product innovation, trading technology and investor education. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options on the CBOE Volatility Index (VIX), the world's barometer for market volatility. Other groundbreaking products engineered by CBOE include equity options, security index options, LEAPS, FLEX options, and benchmark products, such as the CBOE S&P 500 BuyWrite Index (BXM). CBOE's Hybrid Trading System incorporates electronic and open-outcry trading, enabling customers to choose their trading method. CBOE's Hybrid is powered by CBOEdirect, a proprietary, state-of-the-art electronic platform that also supports the CBOE Futures Exchange (CFE), CBOE Stock Exchange (CBSX) and OneChicago. CBOE is home to the world-renowned Options Institute and www.cboe.com, named “Best of the Web” for options information and education.
CBOE is regulated by the Securities and Exchange Commission (SEC), with all trades cleared by the AAA-rated Options Clearing Corporation (OCC).
CBOE®, Chicago Board Options Exchange®, CBOEdirect®, CBOE Volatility Index®, VIX®, FLEX®,, Hybrid®, LEAPS®, CBSX® and CBOE Stock Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated (CBOE). SPXSM, BXMSM and The Options InstituteSM are service marks of CBOE. CFE® is a registered trademark and CBOE Futures ExchangeSM is a service mark of CBOE Futures Exchange, LLC.
S&P®, and S&P 500® are registered trademarks of the McGraw-Hill Companies, Inc. and are licensed for use by CBOE. Standard & Poor's does not promote, market, sell or endorse any product based upon its indices. iPath, iPath ETNs and the iPath logo are registered trademarks of Barclays Bank, PLC.
This press release contains statements which may be considered forward- looking statements within the meaning of the Securities Exchange Act of 1934, including, without limitation, statements regarding operating strategies, future plans and financial results. Forward-looking statements may be accompanied by words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "intend", "may", "possible", "predict", "project" or similar words, phrases or expressions. The Company does not undertake any obligation to update the information contained herein, which speaks only as of the date of this press release. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our recent Registration Statement on Form S-4 (Registration No. 333-140574) under the heading "Forward-Looking Statements" and/or "Risk Factors". Such discussions regarding risk factors and forward-looking statements are incorporated herein by reference.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.