In Case You Missed It: October 2021
Cboe Appoints Bo Chung to Senior Vice President, Global Sales and Index Licensing, Expanding Data and Access Solutions Leadership Team
On October 5, Cboe announced that it expanded the Data and Access Solutions leadership team by appointing Bo Chung to Senior Vice President, Global Sales and Index Licensing. Chung will help position the business for further global growth and adoption of Cboe’s holistic Data and Access Solutions offering.
The Hidden Liquidity in IBHY and IBIG Futures
Cboe’s Michael Mollet, Vice President of Futures, and David Litchfield, Director, EMEA Derivatives Sales, were featured in an article on The Desk discussing how real-money asset managers are finding that Cboe’s cash-settled corporate bond index futures, IBHY and IBIG futures, allow them to track exchange traded funds (ETFs) in a futures wrapper with greater access to leverage.
Cboe Global Markets Reports September 2021 Trading Volume
Cboe reported September 2021 trading volume on October 6. In September, a total of 34.9 million S&P 500 Index options contracts were traded, with 1.7 million contracts changing hands a day on average during the month – the highest month on record since March 2020. Additionally, Cboe SEF set a quarterly average daily notional value (ADNV) record in Non-Deliverable Forwards (NDFs) with nearly $451 million for the third quarter of 2021, and Cboe Europe successfully launched Cboe Europe Derivatives (CEDX), a new Amsterdam-based futures and options marketplace, on September 6 and traded more than 60 contracts in total during the month, across 9 of the 12 products launched.
Inside Volatility Trading: Dawn of a New Era Brings on the Existence of Skew
This month’s edition of Inside Volatility Trading focused on broad-based index options, how historical events help with future assumptions, supply, demand and volatility skew.
Cboe Agrees to Acquire ErisX, Entering Digital Asset Space with Spot, Derivatives and Clearing Platform
Cboe announced its agreement to acquire Eris Digital Holdings, LLC (ErisX) on October 20. ErisX operates a U.S. based digital asset spot market, a regulated futures exchange and a regulated clearing house, giving Cboe a unique opportunity to enter the digital asset spot and derivatives marketplaces. Cboe plans to operate the digital asset business as Cboe Digital and has secured the support of a broad range of market participants who are expected to form a Digital Advisory Committee tasked with advising Cboe on the ongoing development of the Eris spot and derivatives markets.
Cboe Global Markets and MSCI Inc. Expand Relationship, Extend Licensing Agreement Through 2031
On October 21, Cboe and MSCI Inc, announced they had signed a licensing agreement, extending and broadening their strategic relationship through 2031. The agreement builds on many years of successful collaboration, extending Cboe’s rights to offer options trading on MSCI global indices, and creates opportunities for the companies to work together to pursue other strategic initiatives across capital markets.
Cboe Global Markets Declares Fourth-Quarter 2021 Dividend
On October 26, Cboe announced its Board of Directors declared an increased quarterly cash dividend of $0.48 per share of common stock for the fourth quarter of 2021.
Introducing Nanos by Cboe, Smaller and Simpler Options Designed for Retail Traders
Cboe announced plans to launch Nanos by Cboe, a first of its kind options contract designed to simplify options trading on October 27. At 1/100th the size of an XSP option, Nanos by Cboe will help make options trading accessible for the everyday retail trader, allowing them to start small, learn as they go and grow their trading confidence.
Cboe to Distribute Real-Time Data via AWS with Cboe Global Cloud
Also on October 27, Cboe announced a collaboration with Amazon Web Services (AWS) to launch a new, real time, cloud-based market data streaming service called Cboe Global Cloud. The service will help optimize the efficiency and delivery of Cboe’s data services for market participants globally, beginning November 1.
An In-Depth View Into Odd Lots
Cboe’s U.S. Equities Execution Consulting Team analyzed the recent growth of odd lots as they become a significant component of the market. Highlighting the recent recommendations for Targeted Equity Market Structure Improvements by Cboe’s Market Policy and Government Affairs (MPGA) team, the article examines the suggestion to remove the exemption for not displaying customer odd lot orders to further encourage limit order placement in the public markets.
Cboe Options Exchange to List Three Long-Dated SPX Options Expirations, Beginning November 1, 2021
Cboe announced plans to list additional Long-Term Equity AnticiPation Securities (LEAPS) options on the S&P 500 Index. These LEAPS options will offer expiration dates in December 2024, December 2025 and December 2026 on Cboe Options Exchange. LEAPS options have the same characteristics as standard options, but with extended expiration dates of several years into the future, giving market participants effective and efficient tools to trade, manage risk or gain exposure to the broad market over a much longer time frame.
Cboe Reports Financial Results for the Third Quarter of 2021
On October 29, Cboe reported its financial results for the third quarter of 2021. In the third quarter, Cboe’s net revenue for the quarter was $370 million, up 27 percent compared to $292 million in the prior-year period. Read the press release or watch a replay of the presentation on Cboe’s Investor Relations website.
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VIX® Index and VIX® Index Products
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- Not Buy and Hold Investment: VIX Index Products are not suitable to buy and hold because:
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- The VIX Index generally tends to revert to or near its long-term average, rather than increase or decrease over the long term.
- Volatility: The VIX Index is subject to greater percentage swings in a short period of time than is typical for stocks or stock indices, including the S&P 500 Index.
- Expected Relationships: Expected relationships with other financial indicators or financial products may not hold. In particular:
- Although the VIX Index generally tends to be negatively correlated with the S&P 500 Index – such that one tends to move upward when the other moves downward and vice versa – that relationship is not always maintained.
- The prices for the nearest expiration of a VIX Index Product generally tend to move in relationship with movements in the VIX Index. However, this relationship may be undercut, depending on, for example, the amount of time to expiration for the VIX Index Product and on supply and demand in the market for that product.
- Mini VIX futures contracts trade separately from regular-sized VIX futures, so the prices and quotations for Mini VIX futures and regular-sized VIX futures may differ because of, for example, possible differences in the liquidity of those markets.
- Final settlement Value: The method for calculating the final settlement value of a VIX Index Product is different from the method for calculating the VIX Index at times other than settlement, so there can be a divergence between the final settlement value of a VIX Index Product and the VIX Index value immediately before or after settlement. (See the SOQ Auction Information section here for additional information.)
Exchange Traded Products (“ETPs”)
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Cboe Strategy Benchmark Indices
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Index and Benchmark Values Prior to Launch Date
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