Cboe Blogs

Everyone knows the equity markets have been putting up a solid 2017.  The S&P 500 is up about 12% and developed markets, excluding North America, as measured by the MSCI EAFE (MXEA) Index is up about 17.5% for 2017.  However, emerging markets, as displayed by the performance of the MSCI Emerging Markets Index (MXEF) has gained almost 29%.  The chart below shows the performance for MXEF in 2017.     A big trade came into the MXEF post at CBOE yesterday that seems[...]

Open interest for options on the MSCI Emerging Markets Index (MXEF)<http://www.cboe.com/micro/msci/mxef/default.aspx> grew from 98 contracts in mid-January to 9,855 contracts yesterday. Over the past year several institutional investors have expressed to me their 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. KEY FEATURES OF MXEF OPTIONS Key[...]

Open interest for options on the MSCI Emerging Markets Index (MXEF) recently rose above 6,200 contacts for the first time. Over the past month the MXEF options open interest grew from 98 to 6,229 contracts. Over the past year several institutional investors have expressed to me their 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[...]

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[...]

Today CBOE added three new expirations for options on both the MSCI Emerging Markets Index (MXEF) and on the MSCI EAFE Index (MXEA). There now are six expiration dates for options on the MXEF and MXEA indexes – Nov-20-2015 Dec-18-2015 Jan-15-2016 Mar-18-2016 Jun-17-2016 Sep-16-2016 MXEF AND MXEA – PRICES AND IMPLIED VOLATILITY Below are two charts with daily closing values for index prices and the 30-day at-the-money (ATM) implied volatility estimates from Bloomberg. This month, the[...]

On Tuesday, October 6, the CBOE options on the MSCI Emerging Markets Index (MXEF) had reported volume of 472 contracts (236 call options and 236 put options). Why are several investors expressing more interest in the MXEF options that launched earlier this year? Below are four key reasons I have heard from investors. BIGGER NOTIONAL SIZE FOR CASH-SETTLED INDEX OPTIONS As shown in the chart below, many of the cash-settled index options have notional values that are much bigger than the notional[...]

Interest in managing global portfolio exposure has grown in recent weeks. As shown in the price charts below, over the five-trading-day period from August 17 through August 24 – Two key global stock indexes – the MSCI EAFE Index (MXEA) and MSCI Emerging Markets Index (MXEF) – both fell by more than 5%; Several volatility indexes rose considerably – the CBOE Emerging Markets ETF Volatility Index (VXEEM) rose 120%; CBOE EFA ETF Volatility Index (VXEFA) rose 112%, and CBOE China[...]

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[...]

CBOE recently launched trading in options on the MSCI Emerging Markets Index (MXEF) and the MSCI EAFE Index (MXEA).CBOE's options on MSCI indexes are designed to provide investors different ways to efficiently gain exposure to the global equity markets and execute risk management, hedging, asset allocation and income generation strategies. ADDED EXPIRATION DATES At the launch of options on the MSCI EAFE (MXEA) and MXEF indexes, a number of institutional customers expressed great interest in the new[...]

A key topic for global investors today is whether Chinese A-Shares will be included in the popular MSCI Emerging Markets Index. Estimates suggest that about $1.7 trillion in assets track the popular index. CBOE offers a number of volatility and options products to help investors gauge and manage their global equity exposure. Last month MSCI Inc. issued a press release with an announcement that it - “…  will release on June 9, 2015, shortly after 11:00 p.m. Central European Summer[...]

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[...]

Next week, specifically Tuesday April 21st, CBOE will roll out option trading on two indexes calculated by MSCI. The MSCI EAFE (Europe, Australasia, and Far East) and MSCI Emerging Markets (EEM) Index will be the first two of several index option markets based on the MSCI family of indexes that will have listed options available for trading at CBOE. These two new markets will give money managers an efficient method for managing risk exposure to equity markets outside the United States. There will[...]

Regarding the possibility of launching new options on MSCI global indexes, in the past month I have received positive feedback from more than a dozen managers of options-based funds that are listed in a new 2015 white paper. In the past decade a number of managers have requested new CBOE options on MSCI’s global indexes. CBOE announced an April 21 launch date for cash-settled products on two of the world’s best known global indexes – Options on the MSCI EAFE® Index (MXEA),[...]