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Archived CBOE, CBSX, & CFE Press Releases



FOR IMMEDIATE RELEASE


CBOE WINS TWO AWARDS FOR MOST INNOVATIVE NEW INDEXES: VIX AND BXM

Chicago, December 8, 2004 - The Chicago Board Options Exchange (CBOE) announced today that on December 6, 2004, the CBOE S&P 500 BuyWrite Index (BXM) was awarded the Most Innovative Benchmark Index distinction, and the CBOE Volatility Index (VIX) Futures product received the Most Innovative Index Derivative Award at the Super Bowl of Indexing Conference in Phoenix, Arizona.

The Super Bowl of Indexing Conference is an annual conference developed by Information Management Network (IMN) and sponsored by more than fifty investment banks, brokerages, exchanges and index providers from around the world. In its ninth year, the event is attended by industry professionals and academics seeking in-depth information and analysis on a broad spectrum of financial instruments and concepts. CBOE received two of the four Index Products awards.

"We are extremely proud to be selected by such a prestigious group to receive these two very important awards. CBOE has essentially created two new asset classes by developing the BuyWrite Index and Volatility products, and we are pleased that the hard work and investment in innovation made by CBOE and its partners is recognized by this premiere group of industry professionals," said CBOE Chairman and CEO William J. Brodsky.

"I would especially like to recognize our partners for their work in bringing these revolutionary new products to the marketplace," Brodsky continued. "Neither of these products would exist without our partnership with Standard & Poor's. I would also like to salute our colleagues at Goldman Sachs for their invaluable contribution to the development of the VIX Futures product. We thank both Goldman Sachs and Standard & Poor's for their continued support in making these products a success."

About the CBOE S&P 500 BuyWrite Index (BXM)
Created and introduced by CBOE in April 2002, the BXM measures the performance of a theoretical portfolio that sells (or "writes") Standard & Poor's 500 Index call options (SPX) against a portfolio of the stocks included in the Standard & Poor's 500 Stock Index (S&P 500). The index has become the standard benchmark for investors and investment professionals seeking a long-term track record of the buy-write strategy.

Since its introduction, more than five licenses have been granted for the creation of investment products based on the methodology and performance of the BXM.

In October 2004, Ibbotson Associates, a leading independent research firm specializing in asset allocation, concluded in a published study, that the CBOE BXM has had the best risk-adjusted performance of the major domestic and international equity-based indexes over the last 16 years. Other findings of the Ibbotson study include:

-Over the last 16 years the CBOE BXM Index had slightly higher returns and significantly less volatility than the S&P 500 and other stock indexes.

-The risk-adjusted return for the CBOE BXM strategy was 38% higher than that of the S&P 500 for the same time period.

- The BXM buy-write strategy has collected options premium income at an average rate of 1.69% of the underlying asset value, per month, over the 190-month period studied.


CBOE calculates and disseminates the BXM value at the end of each trading day. Historical values for the BXM are available dating back to June 1988. For more information about BXM, its methodology and use as a portfolio management tool, please visit http://www.cboe.com/bxm.

About VIX Futures
VIX Futures (ticker symbol VX) are based on the CBOE Volatility Index, which was created by CBOE in 1993 and quickly became the benchmark index of market sentiment. VIX Futures, the first tradable product based on the VIX, began trading on the CBOE Futures Exchange (CFE) on March 26, 2004. Derived from real-time S&P 500 Index option prices, VIX is designed to reflect investors' consensus view of expected stock market volatility over the next 30 days. VIX Futures are cash settled. The CFE also offers CBOE S&P 500 Three-Month Variance Futures (ticker symbol VT).

About CBOE Futures Exchange (CFE)
The newly formed CFE is a wholly-owned subsidiary of Chicago Board Options Exchange, Incorporated, offering an all-electronic, open access market model, with traders providing liquidity and making markets.CFE trades are cleared by the triple-A rated Options Clearing Corporation (OCC). In addition to VIX and Variance futures, CFE also offers futures on the newly created CBOE China Index (CYX). CFE, the world's newest futures exchange, is regulated by the Commodity Futures Trading Commission (CFTC). More information on CFE and its products, including contract specifications, can be found at: http://www.cboe.com/CFE

About Chicago Board Options Exchange (CBOE)
CBOE, the world's largest options marketplace and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, visit the CBOE website at: http://www.cboe.com/.


CBOE Volatility Index (VIX)