Cboe Blogs

2020: The Clash Should I stay or should I go now? Should I stay or should I go now? If I go there will be trouble And if I stay it will be double So ya gotta let me know The Clash   Markets are fundamentally driven by supply and demand. In general, a well-supplied market will push prices lower, all else constant, and vice versa. Derivative markets, particularly the implied volatility of option values, are reflective of the overall supply/demand dynamic at a given point in time. A shortage[...]

The 2020 U.S. presidential election is projected to be unlike any other in recent history, and the market is responding accordingly. Historically, expected volatility has climbed higher in the months leading up to Election Day, but in 2020, that expected volatility has been driven significantly higher than in election years past. Check back here for the latest insights on market reaction to the November 3 election from Cboe™ experts. Analysis from Inside Volatility Trading Insights from[...]

And I rose In rainy autumn And walked abroad in a shower of all my days. High tide and the heron dived when I took the road        Over the border            And the gates Of the town closed as the town awoke.    A springful of larks in a rolling Cloud and the roadside bushes brimming with whistling    Blackbirds and the sun of October Dylan Thomas If 2020 was a marathon, U.S. readers are approaching mile 20. For our global audience,[...]

How many equity destinations can you trade on? This month, the industry has seen the launch of three new trading venues on top of the existing 13. While this number seems intimidating, increased competition may have some benefits for investors. Each market participant must allocate resources and determine how each market center benefits them. Those benefits depend on the type of flow each industry participant services. To further explore the current liquidity landscape, it is important to first[...]

Financial professionals interested in learning more about this topic are invited to join Cboe for a webinar on September 30. Learn more and register below. In August, the total market capitalizations for the MSCI EAFE Index and the MSCI Emerging Markets Index hit $14 trillion and $6.4 trillion, respectively. Additionally, the country weighting of China’s stocks in the MSCI Emerging Markets Index grew to 42.5% last month. Interest in managing global risk exposure has grown in recent years, and[...]

Insights from the Options Institute   Genuine day will come When the wind decides to run And shakes the stairs that stab the wall And turns the page in a future age Some trees will bend and some will fall But then again so will us all Let’s turn our prayers into outrageous dares And mark our page in a future age Wilco – Jeff Tweedy Sometimes it helps to go back before you try to move forward. We know a lot about the past and it can be instructive about the future. Before we run afoul[...]

The Canadian equity trading landscape has evolved over the past decade, leading to the rise of dark pools, inverted venues, minimum guaranteed fill facilities and asymmetrical speed bumps. Client demand and the difficulty in sourcing blocks within a fragmented marketplace led MATCHNow to launch Conditional Trading in January 2019. Firms up rates in the high 90% range coupled with the inherent cost savings of a midpoint block are proving to be valuable factors in reducing overall trading costs for[...]

Today, Cboe Global Markets™ launched cash-settled options on the S&P 500 ESG Index (ticker: SPESG). The S&P 500 ESG Index is designed to align investment objectives with environmental, social and governance (ESG) values, and the new index options are a potential tool for investors to implement hedging, risk management, income enhancement and asset allocation strategies. Let’s take a look at some recent findings and trends with ESG investing. Growth in ESG Investment Mandates According[...]

Financial professionals interested in learning more about this topic are invited to join Cboe for a webinar on September 16. Learn more about how to register below. Record volatility in early 2020 along with potential heightened uncertainty around the U.S. presidential election, the ongoing COVID-19 pandemic and other concerns have increased interest in harnessing tradable volatility products to manage risk. Let’s see what the VIX futures term structure and other benchmark indices tracking[...]

There’s fire all around But this is all illusion I’ve seen better days than this one I’ve seen better nights than this one Tension is rebuilding Something’s got to give Something's got to give Beastie Boys – Check Your Head It’s difficult to make sense of the world today, but uncertainty (i.e. volatility) is a constant. Accepting that reality can be very empowering. The relative degrees of ambiguity waxes and wanes. Without moving into some watered down new-age[...]

“The stock market isn’t the economy. The economy is production and jobs, and there are shortfalls in virtually every sector of the economy.” -Janet Yellen (Washington Post) In a previous Inside Volatility we highlighted the French Revolution and the potential shifting of volatility regimes. In Charles Dickens' magnum opus, A Tale of Two Cities, he documents the French Doctor Manette after his years of imprisonment during the Reign of Terror. The novel’s beginning is an interesting[...]

You got my heart, you got my soul You got the silver, you got the gold You got the diamonds, from the mine Well that’s alright It’ll buy some time -The Rolling Stones “You’ve Got the Silver” Cboe® is excited to announce the launch of the Mini Cboe Volatility Index (Mini VIX™) futures as of August 10. The Bloomberg ticker is VXLA. The smaller sized futures contract has a $100 multiplier as opposed to the $1000/point inherent in the standard contract. These contracts[...]

With so many different trading metrics and order types available, it can be difficult to effectively navigate the significance of each, especially during times of heightened volatility. When it comes to exchange-traded funds, or ETFs, seemingly small trading factors can have a big impact on the overall investment. Here are a few tips to help you navigate the ETF space. Mind Your Order Type Usage Order-type usage is one of the most basic and easily implemented methods to consider. Many investors automatically[...]

Cboe Futures Exchange (CFE®) launched trading in Mini Cboe Volatility Index® futures (VXMSM) on Monday, August 10.  The increased volatility in 2020 amplified interest in the Cboe Volatility Index (VIX®) and related products, driving demand for a new addition to the VIX Index suite. We’ve compiled a list of features that may help investors better understand the VIX Index and the new Cboe Mini VIX futures. Before reading further, it’s important to note: Mini VIX™[...]

In July, we acquired pan-European clearinghouse EuroCCP, announced plans for Mini VIX futures, shared market insights and more. Follow us on Twitter for daily updates as we continue defining markets and check back here at the end of August for our next monthly update. Cboe Acquires EuroCCP Cboe started July strong, completing its acquisition of EuroCCP on July 1, and announcing plans to launch Cboe Europe Derivatives in 2021. The acquisition brings together two companies that have long championed[...]