FOR IMMEDIATE RELEASE
CBOE TO LAUNCH OPTIONS ON THE CBOE NASDAQ-100 VOLATILITY INDEX AND CBOE RUSSELL 2000 VOLATILITY INDEX TOMORROW;
New Options Join Successful VIX Options, Expanding CBOE's Suite Of Volatility Products
CHICAGO, September 26, 2007
- The Chicago Board Options Exchange (CBOE) will begin trading options on the CBOE Nasdaq-100 Volatility Index (ticker symbol VXN) and the CBOE Russell 2000 Volatility Index (ticker symbol RVX) tomorrow, Thursday, September 27, 2007, under licensing agreements with The Nasdaq Stock Market, Inc. and The Russell Investment Group.
These two new contracts expand the suite of volatility products offered exclusively at CBOE and the CBOE Futures Exchange (CFE). CBOE will now offer options on three of CBOE's volatility benchmarks, as VXN and RVX options will join the popular CBOE Volatility Index (VIX) options. Since their launch in February 2006, VIX options have already traded over twenty million contracts, making VIX options the most successful new product launch in CBOE history.
At the CBOE Futures Exchange, futures on the CBOE Nasdaq-100 Volatility Index (VXN) and the CBOE Russell 2000 Volatility Index (RVX) began trading on July 6, 2007. CFE's other volatility products include: futures on the CBOE Volatility Index (VIX) and the CBOE DJIA Volatility Index (VXD), as well as CBOE S&P 500 3-month (VT) and CBOE S&P 500 12-month Variance (VA) futures.
CBOE Volatility Indexes are designed to reflect investors' consensus view of expected volatility over the next 30 days in the respective underlying indexes, and as such, can be used as a benchmark of investor sentiment. CBOE Volatility Indexes are derived from options prices of each index traded at CBOE.
The CBOE Nasdaq-100 Volatility Index (VXN) is an up-to-the minute market estimate of expected volatility that is calculated by using real-time Nasdaq-100 Index (NDX) option bid/ask quotes. VXN uses nearby and second nearby options listed at CBOE with at least eight days left to expiration and then weights them to yield a constant, 30-day measure of the expected volatility of the Nasdaq-100 Index. The same methodology is applied to the CBOE Russell 2000 Volatility Index (RVX), which uses the real-time Russell 2000 Index (RUT) option bid/ask quotes. To learn more about CBOE's Volatility Indexes, including methodology, daily and historical data and charts, contract specifications, and other information, please visit www.cboe.com/volatility.
Both VXN and RVX options will be cash-settled, European-style exercise, and are based on the value of the respective underlying Volatility Index. Trading hours will be 8:30 a.m. to 3:15 p.m. (Chicago Time). VXN and RVX options will both trade on the February expiration cycle, with introductory expirations in October, November, December and February. Initial strike prices in VXN options have been set at 10, 15, 17 ½, 20, 22 ½, 25, 27 ½, 30, 35 and 40, with no position limits, while initial strike prices in RVX options have been set at 15, 20, 22 ½, 25, 27 ½, 30, 32 ½, 35, 37 ½, 40 and 45, with position limits of 50,000 contracts. Group One Trading, LP has been named the Designated Primary Market Maker (DPM) in both options.
CBOE, the largest U.S. options exchange and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about CBOE and its products, access CBOE's website at www.cboe.com/.
CBOE®, Chicago Board Options Exchange®, CBOE Volatility Index® and VIX® are registered trademarks of Chicago Board Options Exchange, Incorporated. The methodology of the CBOE Volatility Indexes (VIX, VXD, VXN, RVX) is owned by CBOE and may be covered by one or more patents or pending patent applications. CFE® is a registered trademark and CBOE Futures Exchange is a service mark of CBOE Futures Exchange, LLC. SPXSM is a service mark of Chicago Board Options Exchange, Incorporated. Dow Jonesâand DJIAâare 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 and Dow Jones makes no representations regarding the advisability of investing in such products. Nasdaq®, Nasdaq-100® and Nasdaq-100 Index® are trademarks of The Nasdaq Stock Market, Inc. (with which its affiliates are the "Corporations"). These marks are licensed for use by CBOE in connection with the trading of products based on the Nasdaq-100 Index. The products have not been passed on by the Corporations as to their legality or suitability. The products are not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S). The Russell 2000® Index is a registered trademark of Russell Investment Group used under license. S&P® and S&P 500® 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.
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.