CBOE Holdings plans to list weekly expirations for VIX futures and options. VIX Weeklys futures are expected to begin trading at CBOE Futures Exchange (CFE®) in July, subject to regulatory review. VIX Weeklys options are expected to begin trading at Chicago Board Options Exchange® shortly thereafter, also subject to regulatory approval.
In 2005, CBOE® pioneered the short term options space by introducing the first weekly expiring options contract. Except for more frequent expiration dates, Weeklys generally have the same contract specifications as monthly expiring contracts. Weekly options traded on CBOE have become extremely popular with investors. For example, SPX Weeklys currently represent approximately 30% of all SPX options volume.
New weekly expirations for VIX futures and options will be listed on Thursdays (excluding holidays) and expire on Wednesdays. CBOE and CFE may list up to six consecutive weekly expirations for VIX futures and options.
The addition of weekly expirations to standard monthly futures and options expirations offers volatility exposures that more precisely track the performance of the VIX Index. The closer VIX futures and options are to expiration, the more closely they generally track the VIX Index. By 'filling the gaps' between monthly expirations, investors may obtain new opportunities to establish short-term VIX positions, and fine-tune the timing of their hedging and trading activities.
Weeklys VIX futures and options on VIX are a different product from previously listed futures and options on the VXSTSM Index, the CBOE Short-Term Volatility IndexSM. The VIX Index measures a 30-day period of implied volatility while the VXST Index provides a gauge of 9-day implied volatility. CBOE expects that margin and capital requirements for VIX futures and options with weekly expirations will be lower than the margin and capital requirements for VXST futures and options. Importantly, CBOE expects that quotes on VIX Weeklys will be listed within VIX futures and options chains.