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SOURCE Chicago Board Options Exchange
- New Products Offer Volatility Trading on Premier Measure of Small-Cap U.S. Stocks
CHICAGO, Sept. 30, 2013 /PRNewswire/ -- CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Chicago Board Options Exchange, Incorporated (CBOE®) and CBOE Futures Exchange, LLC (CFE®) will launch trading on Russell 2000® Volatility Index options (RVX) and futures (VU).
Trading on Russell 2000 Volatility Index futures will begin on Wednesday, October 30, with options trading to begin in the weeks that follow, pending regulatory review.
The Russell 2000® Index is the premier measure of the performance of small-capitalization U.S. stocks and an effective gauge and play on the health of the U.S. economy -- 84 percent of the revenues generated by the companies in the index come from within the U.S.
Because U.S. small-cap and large-cap indexes are affected by different economic factors, the implied volatility of one does not always closely correlate to the other. VU futures and RVX options will allow investors to hedge volatility of a portfolio of small-cap stocks and to spread the volatility level of the Russell 2000 against large-cap index volatility to take advantage of differences between small- and large-cap company dynamics.
"We are excited to expand our partnership with Russell Indexes by adding volatility futures and options on the definitive vehicle for U.S. small-cap market exposure - the Russell 2000 Index," said CBOE Holdings Chief Executive Officer Edward T. Tilly. "Used on their own or in combination with our flagship CBOE Volatility Index products, Russell Volatility Index products will allow customers to hedge, diversify or take a directional view on volatility in the small-cap market sector."
"Extending the ways investors can access and use Russell Indexes is an important part of our strategy as a leading global index provider," said Ron Bundy, CEO of Russell Indexes. "CBOE is a pioneer in index options trading, offers broad reach and liquidity for index investors and traders and is a leader in options education. These factors are all important to us as we continue to build out our customer offering and enhance the products and services we provide to our clients."
The calculation of the CBOE Russell 2000 Volatility Index (RVX Index) is based on the CBOE Volatility Index® (VIX® Index) methodology applied to CBOE listed options on the Russell 2000 Index (RUT), the third most actively traded index option at CBOE in the first half of 2013. The RVX Index is an up-to-the-minute market estimate of the expected 30-day volatility of the RUT Index, calculated using real-time bid/ask quotes of RUT options that are listed on CBOE.
Jane Street Capital, LLC will serve as the Designated Primary Market Maker (DPM) for VU futures traded on CFE, and Group One Trading will serve as the DPM for the RVX options traded on CBOE.
For more information on the Russell 2000 Volatility Index and products, see www.cboe.com/RVX. 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.
About CBOE Holdings, Inc.
CBOE Holdings, Inc. (NASDAQ: CBOE) is the holding company for Chicago Board Options Exchange (CBOE), the CBOE Futures Exchange (CFE) and other subsidiaries. CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options and volatility trading through product innovation, trading technology and investor education. CBOE Holdings offers equity, index and ETP options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options and futures on the CBOE Volatility Index (the VIX Index). Other products engineered by CBOE include equity options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P BuyWrite Index (BXM). CBOE Holdings is home to the world-renowned Options Institute and www.cboe.com, the go-to place for options and volatility trading resources.
CBOE®, Chicago Board Options Exchange®, CFE®, FLEX®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWriteSM, BXMSM, SPXSM, CBOE Futures ExchangeSM, Execute SuccessSM, and The Options Institute are service marks of Chicago Board Options Exchange, Incorporated (CBOE). Russell 2000® is a registered trademark of Russell Investments, used under license. Standard & Poor's®, S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services, LLC and have been licensed for use by CBOE and CFE.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. Russell Investments is the owner of the trademarks, service marks and copyrights related to its respective indexes. Russell's indexes are unmanaged and cannot be invested in directly.
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