• Sep 10, 2019, 4:19 PM

    Cboe RMC Europe: Day Two in Munich

    Cboe RMC Europe: Day Two in Munich

    Ed Tilly, Chairman, President and CEO of Cboe Global Markets, opened day two of Cboe RMC Europe with an update on the volatility market and Cboe’s products. Tilly introduced the conference keynote speaker, who discussed Brexit and its implications. Attendees then turned their attention to a panel discussion about equity volatility trading with representatives from Societe Generale, Legal & General Investment Management, Aviva Investors and Fulcrum Asset Management. The panelists discussed[...]

  • Sep 9, 2019, 5:22 PM

    Cboe RMC Europe Day One Recap

    Cboe RMC Europe Day One Recap

    RMC Europe is in full swing at the beautiful Andaz Munich hotel! Follow us on Twitter and LinkedIn for more updates from Munich. What’s Cboe RMC Without Some Volatility Talk? Tim Edwards, managing director of Index Strategy for S&P Dow Jones Indices, kicked off the conference with a talk about volatility benchmarks, including the Cboe Volatility Index (VIX Index) and Cboe Skew Indexes. Edwards discussed what these indexes may tell investors about market expectations for day-to-day volatility,[...]

  • Sep 4, 2019, 3:18 PM

    Inside Volatility Trading: September 4, 2019

    Inside Volatility Trading: September 4, 2019

    If You Plant Ice, You’re Gonna Harvest Wind The trade war between the leaders of the two largest economies in the world continues to percolate; so too has volatility. Based on historical data, volatility as measured by intraday S&P 500 ranges tends to come in bunches. U.S. farmers, who have been the primary target for the Chinese in their efforts to counter the Trump Administration’s tariffs, have experienced volatility of their own. According to the American Farm Bureau, American[...]

  • Aug 20, 2019, 2:16 PM

    Inside Volatility Trading: August 20, 2019

    Inside Volatility Trading: August 20, 2019

    We Were Certainly Uncertain Ronald Reagan used to joke that if Trivial Pursuit were designed by economists, “it would have 100 questions and 3,000 answers.” In a similar vein, acerbic investors often point out that economists have “accurately predicted all 21 of the last 4 recessions.” Well, everyone from tenured econ professors to armchair economists have been ruminating on last week’s inversion of the U.S. yield curve. On Wednesday, August 14, the yield on 2-year[...]

  • Aug 12, 2019, 12:42 PM

    Worth Reading: Cboe’s Chief Policy Officer On the Dangers of the Current Exposure Method (via IFLR)

    Worth Reading: Cboe’s Chief Policy Officer On the Dangers of the Current Exposure Method (via IFLR)

    In a recent article for International Financial Law Review, Cboe’s Chief Policy Officer, Angelo Evangelou, detailed why the Current Exposure Method (CEM) – a methodology created to determine capital requirements for counterparty credit risk to derivatives in the U.S. – is harming liquidity provision in the options market. Angelo explains that because of CEM, banks in the options clearing business are unnecessarily incurring capital charges and makes the case for change. In the piece,[...]

  • Aug 6, 2019, 1:13 PM

    Inside Volatility Trading: August 6, 2019

    Inside Volatility Trading: August 6, 2019

    Powell & Trump Stir the Winds of Change “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” —William Arthur Ward The previous two Inside Volatility Newsletters shone a light on relatively low levels of implied volatility for 1-month VIX options as well as muted historical volatility for the S&P 500® Index (SPX). The confluence of these types of vol events could portend a potential shift in sentiment. At the very[...]

  • Jul 26, 2019, 8:28 AM

    Fact | Exchanges Want to Give Public Investors a Fair Shot

    Fact | Exchanges Want to Give Public Investors a Fair Shot

    Cboe opposes the SEC’s Transaction Fee Pilot because we want to protect public investors from the harm it will cause. Bryan Harkins, Executive Vice President, Co-Head Markets at Cboe Global Markets, offers a counterargument to the opinion piece, “The SEC Wants to Give Public Investors a Fair Shot.” A recent Wall Street Journal opinion piece authored by Professor Larry Harris of the University of Southern California attempts to make the case for the U.S. Securities and Exchange[...]

  • Jul 24, 2019, 3:16 PM

    Inside Volatility Trading: July 24, 2019

    Inside Volatility Trading: July 24, 2019

    Danger, I’ve Been Told to Expect It By most (short-dated) measures, SPX historical volatility is quite low. The SPX 10- and 30-day historical vol measures are 6% and 7.4%, respectively. The only other recent corollaries in terms of market calm are May 2, 2019 (SPX 30-day 7.4%) and October 9, 2018 (SPX 30-day 6.1%). In both recent instances, there was a fairly significant pullback that followed. On May 1, 2019, the SPX made another new all-time high. Between the highs on May 1 and the intraday[...]

  • Jul 16, 2019, 5:34 PM

    Index FLEX Contracts Hit New Records as Investors Customize Their Options

    Index FLEX Contracts Hit New Records as Investors Customize Their Options

    FLexible EXchange Options (FLEX® Options) offer customers customizable terms for strike prices, exercise styles and expiration dates with the transparency, administrative ease and clearing guarantees of standard listed options. Since Cboe first introduced FLEX® Options in 1993, interest has grown tremendously – most notably in the first half of 2019. New Volume and Open Interest Records for FLEX Index Options Cash-settled index FLEX Options set new all-time records for open interest[...]

  • Jul 10, 2019, 4:22 PM

    Inside Volatility Trading: July 10, 2019

    Inside Volatility Trading: July 10, 2019

    Insights with Kevin Davitt Cboe’s VVIXSM Index, which is an indicator of the expected volatility of the 30-day forward price of the Cboe Volatility Index (the VIX® Index), has garnered considerable attention in recent days. On Tuesday, July 2, the implied volatility of VIX options as measured by the VVIX fell below 76 for the first time since late February of 2019. For those unfamiliar, the VIX Index uses strips of S&P 500® Index (SPX) options to calculate a dynamic forward-looking[...]

  • Jul 1, 2019, 11:20 AM

    Cboe Launches First-Ever Global Options-Based Benchmark Indexes

    Cboe Launches First-Ever Global Options-Based Benchmark Indexes

    Cboe MSCI Benchmark Indexes Delivered Less Volatility and Strong Risk-Adjusted Returns Over the years, investors have found utility in Cboe’s benchmark indexes that reflect the writing of options based on U.S. stock indexes. These indexes, such as the BXM, PUT and BXRD indexes, can help market participants enhance the cash flow and lower the volatility typically associated with equity investing. For investors looking to replicate the same analysis on global stocks, Cboe introduced BuyWrite[...]

  • Jun 25, 2019, 9:08 AM

    Worth Watching: What Matters in the Week Ahead as June Comes to a Close

    Worth Watching: What Matters in the Week Ahead as June Comes to a Close

    With so much going on in the world, it’s hard to know what deserves your attention, so we narrowed it down for you. Here’s what we’re watching this week and why it matters. From the events that have market-moving potential to the indexes that will give you a glimpse into what’s on everyone’s mind, here’s what you need to know as we end June. Interest Rates in the U.S. and Globally On the heels of the most recent Fed Meeting – as well as comments from Mario[...]

  • Jun 11, 2019, 2:07 PM

    Inside Volatility Trading: June 11, 2019

    Inside Volatility Trading: June 11, 2019

    Stocks, Bonds and Volatility All Rise With Market Uncertainty Source: Yahoo! Finance A confluence of conflicting market news around tariffs, Fed action, and the weekly jobs report sent stocks, bonds and volatility all higher on Friday, June 7. It’s very uncommon for all three to rise at the same time. In fact, Friday, June 7 was only the third time in the last 10 years when volatility (as measured by VIX Index) rose on the same day that the S&P 500 was up more than 1% and bonds (as measured[...]

  • Jun 7, 2019, 4:18 PM

    Cboe Celebrates Medal of Honor Recipients with Opening Bell-Ringing Ceremony

    Cboe Celebrates Medal of Honor Recipients with Opening Bell-Ringing Ceremony

    Congressional Medal of Honor recipients and representatives from the Congressional Medal of Honor Foundation joined Cboe on Friday, June 7, for a special opening bell-ringing ceremony. Now in its 20th year, the Congressional Medal of Honor Foundation preserves the legacy of the Medal of Honor and supports the Congressional Medal of Honor Society and Medal of Honor recipients. The Medal of Honor is the highest award for valor that can be bestowed upon an individual serving in the Armed Forces. From[...]

  • Jun 5, 2019, 1:38 PM

    New Volume and Open Interest Records for Mini-SPX Index (XSP) Options at Cboe and EDGX

    New Volume and Open Interest Records for Mini-SPX Index (XSP) Options at Cboe and EDGX

    As May came to close, some trends in Cboe’s Mini-SPX Index (XSP) options emerged, including higher volumes and record open interest. For background, Mini-SPX options are just as their name implies, a smaller contract, 1/10th the value of S&P 500 Index (SPX) options. This smaller size provides added flexibility, which may help an investor hedge a specific desired exposure or facilitate accurate allocations of index trades among many customer accounts –among other uses. I’ve recently[...]