EEM Archives - Cboe Blogs

  • Education | Trade Ideas | Feb 4, 2016, 9:46 AM

    Open Interest for Options on MSCI Emerging Markets Index (MXEF) Tops 600 Contracts

    Open Interest for Options on MSCI Emerging Markets Index (MXEF) Tops 600 Contracts

    This last week the open interest for options on the MSCI Emerging Markets Index (MXEF) rose above 600 contacts for the first time. Over the past year several institutional investors have expressed interest in the potential for a liquid MXEF options contract, particularly because the MXEF options contract is cash-settled and has a notional size that is about 24 times larger than options on the EEM ETF. VOLATILITY SKEW FOR MXEF OPTIONS The volatility skew chart below shows that Bloomberg has estimated[...]

  • Market News | Nov 30, 2015, 7:30 PM

    CBOE CEO Edward Tilly on New Initiatives, Expanding Customer Reach in Asia

    CBOE CEO Edward Tilly on New Initiatives, Expanding Customer Reach in Asia

    CBOE CEO Edward Tilly began day two of CBOE RMC Asia in Hong Kong with a tribute of sorts to the growth and expansion of CBOE’s Risk Management Conferences. Years of success in the U.S. and Europe have paved the road to CBOE’s inaugural event in Asia this year. Turning to product news, Tilly highlighted the recent launches of VIX Weeklys futures in July and VIX Weeklys options in October. “We worked closely with our VIX user base to develop a short-term volatility product that more[...]

  • Market News | Nov 17, 2015, 8:30 AM

    Skew Charts to Prepare for Conference in Hong Kong

    Skew Charts to Prepare for Conference in Hong Kong

    This month I am planning to travel to the First Annual CBOE Risk Management Conference (RMC) Asia, which will be held on November 30 – December 1 at the JW Marriott Hotel, Pacific Place, 88 Queensway, Hong Kong. In my preparations for the trip, I am analyzing the skew charts for a number of option classes, including options on the S&P 500®, the CBOE Volatility Index® (VIX®), and the EEM and FXI ETFs. SKEW CHART FOR SPX OPTIONS As noted in the White Paper on the CBOE SKEW[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Jul 7, 2015, 12:15 PM

    Weekly MSCI Index Review - 7/7/2015

    Weekly MSCI Index Review - 7/7/2015

    Tuesday of each week is the time we have set aside to discuss international markets on the CBOE Options Hub. Recently CBOE launched index option trading on two of the most widely followed equity market indexes that depict performance for equity markets outside the United States. The MSCI EAFE Index (MXEA) measures the performance of equities in developed markets outside of North America and the MSCI Emerging Markets Index (MXEF) focuses on emerging markets such as China, South Korea, and India. The[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Jun 30, 2015, 3:15 PM

    Bullish EEM Trade from Monday

    Bullish EEM Trade from Monday

    As CBOE expands the number of markets available for trading to include foreign indexes we are going to do the same in this space every Tuesday through taking a look at derivatives based on the MSCI family of indexes.  With the weakness in global markets on Monday I decided to search around for a trade in EEM ETF options that may be trying to take the other side of low equity prices. The daily chart below shows that EEM was down about 2.4% which was a bit more than the drop in[...]

  • Market News | Trader Talk | Apr 23, 2015, 6:58 PM

    Block Trade Analysis - EEM Ratio Spread

    Block Trade Analysis - EEM Ratio Spread

    Late Wednesday a big trader came in who appears to have a pretty specific opinion about the Emerging Market Sector.   With less than an hour to go in the trading day there was a buyer of 25,000 EEM May 43.50 Calls at 0.66 who then also sold 50,000 EEM May 44.50 Calls for 0.26. The net result was a trade that does well if EEM moves higher over the next few weeks but not too high. The payoff diagram below shows how this works with a discussion to follow. If held to expiration, this trade[...]

  • Technical Analysis & Charts | Education | Futures | Apr 21, 2015, 10:40 AM

    $3.7 Trillion in A.U.M. Tracks EAFE and E.M. Indexes, as First-ever Index Options Launch

    $3.7 Trillion in A.U.M. Tracks EAFE and E.M. Indexes, as First-ever Index Options Launch

    On Tuesday April 21 CBOE launched its first-ever trading in cash-settled options on two MSCI indexes – the MSCI Emerging Markets Index (MXEF) and the MSCI EAFE Index (MXEA). Options on the MSCI Emerging Markets Index and the MSCI EAFE Index are designed to enable investors to efficiently hedge and manage their non-U.S. equity portfolio exposures, to diversify their portfolios, or to generate added income. $TRILLIONS IN ASSETS UNDER MANAGEMENT In mid-2014 the combined assets under management[...]

  • Blogging Options | Trader Talk | Apr 21, 2015, 7:54 AM

    Blogging Options: CBOE Morning Update 4.21.15

    Blogging Options: CBOE Morning Update 4.21.15

    Markets look to add to yesterdays gains and Q1 earnings reports continue to flood in.  Overseas markets mostly higher, traders watching events overseas as a Chinese-owned company defaulted overnight and EU and Greece rhetoric getting louder.  May Crude futures expire today.  TEVA, Mylan merger being heard again this morning, Mylan had made a bid for Perrigo last week  MSCI EEM, EAFE Index options launch at CBOE this morning.  Volatility as an asset class IBM (IBM) is up $0.64[...]

  • Market News | Trader Talk | Mar 19, 2015, 11:32 AM

    Block Trade Analysis - Emerging Market Bull Put Spread

    Block Trade Analysis - Emerging Market Bull Put Spread

    Early yesterday, long before Janet Yellen shared her insights with the world, there was a block trade I came across with a bullish outlook for Emerging Markets. About 5 minutes after the opening bell rang there was a large seller of the EEM Apr 17th 39 Puts at 0.79 who purchased a similar number of EEM Apr 17th 37 Puts at 0.26 for a net credit of 0.51. At the time of the trade EEM was trading around 39.10, but moved higher in sync with the equity market rally that occurred after the FOMC announcement[...]

  • Technical Analysis & Charts | Trader Talk | Strategy | Mar 11, 2015, 11:28 AM

    Comparing SPX and MSCI Price Action

    Comparing SPX and MSCI Price Action

    Today CBOE set the date (pending regulatory approval) for the launch of trading of the MSCI EAFE (EAFE) and MSCI Emerging Markets (EEM) index options. Recently I was at a conference where an individual trader told me all he trades is SPX.   He said he loves (his words not mine) the cash settlement feature of SPX options. He went on to say he’d been looking around for another index option market to trade and said he felt EAFE and EEM were going to give him that[...]

  • Market News | Trader Talk | Strategy | Feb 25, 2015, 10:00 AM

    Combining CBOE and MSCI Gives Investors the World

    Combining CBOE and MSCI Gives Investors the World

    In a few weeks CBOE will begin listing options on two of the widely followed MSCI Indexes. This addition of cash settled index options on the MSCI EAFE and MSCI Emerging Market Indexes will result in investors being able to gain exposure to just about every investible market in the world by trading at CBOE. After such a bold statement, an explanation is definitely in order. Before discussing the world I’ll address the United States. On a notional basis the S&P 500 (SPX) Index option market[...]

  • Market News | VIX | Trader Talk | Futures | Jan 1, 2015, 8:00 PM

    Emerging Market Volatility in 2014

    Emerging Market Volatility in 2014

    Despite the Brazilian market experiencing excessive volatility in 2014, the CBOE Emerging Markets ETF Volatility Index (VXEEM – 22.26) was at relatively low levels. The iShares Emerging Markets ETF (EEM – 39.29) ended 2014 down a little over 3% which was better than many market observers were expecting. Also, note on the chart below that VXEEM ended the year about where it started the year, which stands out relative to many other volatility indexes which finished the year higher than[...]

  • Market News | Trader Talk | Strategy | Dec 23, 2014, 11:30 PM

    Trader Looking for a Better 2015 for Emerging Markets

    Trader Looking for a Better 2015 for Emerging Markets

    At least one trader is looking for 2015 to be a green year for emerging markets. In trader-speak a green year means higher levels. Earlier this week, when the iShares MSCI Emerging Markets ETF (EEM) was trading around 39.30 there was a buyer for a very long dated call spread. Looking to December of 2015 and EEM being at or above 41.50 a buyer came into the market purchasing 50,000 EEM Dec 2015 38.50 Calls at 3.85 and selling 50,000 EEM Dec 2015 41.50 Calls for 2.30 and a net cost of 1.55. As seen[...]