Cboe, CBSX, & CFE Press Releases



CHICAGO, February 25, 2009 -The CBOE Futures Exchange, LLC (CFE) today announced that on Monday, March 2, it plans to launch trading in CBOE mini-VIX futures, a new contract which will be one-tenth the size of CFE's standard CBOE VIX futures contract.The CBOE Volatility Index (VIX), based on real-time S&P 500 Index (SPX) options listed on Chicago Board Options Exchange (CBOE ), reflects investors' consensus view of future expected market volatility of the S&P 500 Index.

"We expect that the mini-VIX futures contract will attract the attention of sophisticated investors and institutions who are looking for a smaller-scale play on implied volatility that's independent of the direction and level of stock prices, or a way to hedge equity returns, diversify portfolios, and spread implied against realized volatility," said CFE Managing Director Andrew Lowenthal. "As seen over the last year, the VIX has experienced some dramatic spikes, and a smaller VIX futures contract with proportionately lower margins may be more manageable for a wider variety of users."

"We look forward to participating in CFE's new mini-VIX futures, as we see the smaller contract as an attractive trading vehicle for the individual investor," said David Graff, Senior Trader at Wolverine Trading, one of the firms that will be making markets when trading begins. "Many of today's very successful mini-contracts have started out as larger contracts and have become just as successful as their larger counterparts."

"An additional benefit," Graff said, "is that VIX options traders now can hedge with a like-sized futures contract, so we expect these traders to be natural participants."

The new cash-settled CBOE mini-VIX futures contract (ticker symbol VM) initially will list March, April and May serial futures months, which coincide with CBOE's S&P 500 nearby options months. The new, smaller contract features a $100 multiplier versus $1,000 for the larger VIX futures contract, with a minimum price movement (tick) of $5 per contract.

As with other futures offerings, CFE will have a number of liquidity providers who will support two-sided markets.

CBOE Futures Exchange currently offers futures on six different contracts, including: the CBOE Volatility Index (VIX), CBOE DJIA Volatility Index (VXD), CBOE Russell 2000 Volatility Index (RVX) and CBOE S&P 500 3-Month and 12-Month Variance (VT and VA, respectively).


Contract Size
VIX times $100
Like the cash index, pricing is stated in decimals
Minimum Price Intervals
0.05 of one CBOE Volatility Index point = $5.00/contract
Dollar Value/Tick
Contract Months
Initially up to three near-term serial months
Trading Hours
8:30 a.m. to 3:15 p.m., Chicago time
Termination of Trading
Day before the Final Settlement Date (see holiday treatment in full specifications)
Final Settlement Price
30 days prior to expiration of nearby SPX options with at least eight days left to expiration - generally the Wednesday that is 30 days prior to the third Friday of the calendar month immediately following the month in which the mini-VIX contract expires (see holiday treatment in full specifications)
Cash settled
Position Limits
5,000 contracts
Minimum Reportable Level
250 contracts

CFE, launched in March 2004, 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).CBOE Futures Exchange is regulated by the Commodity Futures Trading Commission (CFTC).More information on CBOE mini-VIX futures, can be found at: http://cfe.cboe.com/Products/Products_VM.aspx

CBOE Media Contacts:
Gail Osten
(312) 786-7123

Gary Compton
(312) 786-7612

Analyst Contact:
Debbie Koopman
(312) 786-7136

CBOE®, Chicago Board Options Exchange®, CBOEdirect®, CBOE Volatility Index®, VIX®, XEO®, OEX®, CBSX® and CBOE Stock Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated.SPXSM, XSPSM, MNXSM, GVZSM, EVZSM, OVXSM, BXOSM, RUHSM, VXDSM, VXNSM, RVXSM, VPDSM, VPNSM, VTYSM, VXOSM, and VXVSM are service marks of Chicago Board Options Exchange, Incorporated.CFE® is a registered trademark and CBOE Futures ExchangeSM is a service mark of CBOE Futures Exchange, LLC.Dow Jones®, DJIA®, and DIAMONDS® are registered trademarks of Dow Jones & Company, Inc. Dow Jones Industrial AverageSM and Options on the DowSM are service marks of Dow Jones & Company.CBOE's Options on the Dow based on the Dow Jones Industrial Average and financial products based on the CBOE DJIA Volatility Index are not sponsored, endorsed, marketed or promoted by Dow Jones. S&P®, S&P 100®, S&P 500®, and SPDR are registered trademarks of the McGraw-Hill Companies, Inc. and are licensed for use by the Chicago Board Options Exchange, Incorporated pursuant to a License Agreement. The Russell 2000® Index is a registered trademark of The Frank Russell Company used under license.Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and PowerShares QQQ TrustSM are trademarks of The Nasdaq Stock Market, Inc. iShares is a service mark of Barclays Global Investors, N.A. "HOLDRS" and "Holding Company Depositary ReceiptS" are service marks of Merrill Lynch & Co., Inc.

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.

In connection with the proposed restructuring transaction, CBOE Holdings, Inc. ("CBOE Holdings") has filed certain relevant materials with the United States Securities and Exchange Commission (SEC), including a registration statement on Form S-4. Members are encouraged to read the registration statement, including the proxy statement/prospectus that are a part of the registration statement, because it contains important information about the proposed transaction. Members are able to obtain a free copy of the proxy statement/prospectus, as well as the other filings containing information about CBOE Holdings and the Chicago Board Options Exchange, Incorporated ("CBOE"), without charge, at the SEC's Web site, http://www.sec.gov/, and the companies' website, http://www.cboe.com/.In addition, CBOE members may obtain free copies of the proxy statement/prospectus and other documents filed by CBOE Holdings or the CBOE from CBOE Holdings by directing a request to the Office of the Secretary, CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605.

CBOE Holdings, the CBOE and their respective directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of CBOE Holdings and of the CBOE is available in the prospectus/proxy statement.

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