Cboe Announces Planned Launch of New Cboe S&P 500 Variance Futures
Cboe Global Markets (CBOE) has announced plans to launch a redesigned Cboe S&P 500 Variance Futures contract (VA), set to begin trading on September 23, 2024, subject to regulatory review. The new product aims to simplify variance trading and settlement, offering an exchange-listed alternative to OTC variance swaps. Key features include:
- Settlement based on annualized realized variance of the S&P 500 Index
- Quoting and trading directly in variance units with a $12 contract size
- Alignment with standard S&P 500 Index (SPX) options expiration dates
- Benefits of price discovery, central clearing, and improved accessibility
The redesign addresses customer feedback and aims to provide a more capital-efficient and user-friendly approach to variance trading in the current regulatory landscape.
Cboe Global Markets (CBOE) ha annunciato piani per lanciare un contratto per i futures sulla varianza S&P 500 rielaborato (VA), che inizierà a essere negoziato il 23 settembre 2024, soggetto a revisione normativa. Il nuovo prodotto mira a semplificare il trading e il regolamento della varianza, offrendo un'alternativa quotata in borsa agli swap di varianza OTC. Le caratteristiche principali includono:
- Regolamento basato sulla varianza realizzata annualizzata dell'indice S&P 500
- Quotazione e trading direttamente in unità di varianza con una dimensione del contratto di $12
- Allineamento con le date di scadenza delle opzioni standard dell'indice S&P 500 (SPX)
- Vantaggi nella scoperta del prezzo, compensazione centrale e miglior accessibilità
Il redesign risponde ai feedback dei clienti e mira a fornire un approccio più efficiente dal punto di vista del capitale e più user-friendly per il trading della varianza nel contesto normativo attuale.
Cboe Global Markets (CBOE) ha anunciado planes para lanzar un contrato de futuros de varianza rediseñado del S&P 500 (VA), que comenzará a negociarse el 23 de septiembre de 2024, sujeto a revisión regulatoria. El nuevo producto tiene como objetivo simplificar el comercio y la liquidación de la varianza, ofreciendo una alternativa cotizada en bolsa a los swaps de varianza OTC. Las características clave incluyen:
- Liquidación basada en la varianza realizada anualizada del índice S&P 500
- Cotización y negociación directamente en unidades de varianza con un tamaño de contrato de $12
- Alineación con las fechas de vencimiento de las opciones estándar del índice S&P 500 (SPX)
- Beneficios de descubrimiento de precios, compensación central y mejor accesibilidad
El rediseño responde a los comentarios de los clientes y tiene como objetivo proporcionar un enfoque más eficiente en capital y fácil de usar para el comercio de varianza en el actual entorno regulatorio.
Cboe 글로벌 마켓(CBOE)는 재설계된 S&P 500 분산 선물 계약(VA)을 출시할 계획을 발표했으며, 이는 2024년 9월 23일에 거래를 시작할 예정입니다(규제 검토 대상). 새로운 상품은 분산 거래 및 결제를 간소화하는 것을 목표로 하며, OTC 분산 스왑에 대한 거래소 상장 대안을 제공합니다. 주요 특징은 다음과 같습니다:
- S&P 500 지수의 연간 실현 분산을 기반으로 한 정산
- $12 계약 규모로 분산 단위로 직접 견적 및 거래
- S&P 500 지수(SPX) 옵션 만기일과의 일치
- 가격 발견, 중앙 청산 및 접근성 향상에 대한 혜택
이 디자인은 고객 피드백에 대응하며, 현재의 규제 환경에서 자본 효율적이고 사용자 친화적인 분산 거래 접근 방식을 제공하는 것을 목표로 합니다.
Cboe Global Markets (CBOE) a annoncé des projets pour lancer un contrat à terme sur la variance du S&P 500 redessiné (VA), qui devrait commencer à être négocié le 23 septembre 2024, sous réserve d'une révision réglementaire. Le nouveau produit vise à simplifier le trading et le règlement de la variance, en offrant une alternative cotée en bourse aux swaps de variance OTC. Les principales caractéristiques incluent:
- Règlement basé sur la variance réalisée annualisée de l'indice S&P 500
- Cotation et négociation directement en unités de variance avec une taille de contrat de 12 $
- Alignement avec les dates d'expiration des options standard de l'indice S&P 500 (SPX)
- Avantages en matière de découverte des prix, de compensation centrale et d'accessibilité améliorée
Le redesign prend en compte les retours des clients et vise à fournir une approche plus efficace en capital et plus conviviale pour le trading de variance dans le contexte réglementaire actuel.
Cboe Global Markets (CBOE) hat Pläne angekündigt, einen überarbeiteten S&P 500 Varianz-Futures-Vertrag (VA) einzuführen, der am 23. September 2024 mit dem Handel beginnen soll, vorbehaltlich einer regulatorischen Prüfung. Das neue Produkt zielt darauf ab, den Handel und die Abwicklung von Varianz zu vereinfachen und bietet eine börsennotierte Alternative zu OTC-Varianz-Swaps. Wichtige Merkmale sind:
- Abwicklung basierend auf der annualisierten realisierten Varianz des S&P 500 Index
- Direktes Quotieren und Handeln in Varianzeinheiten mit einer Vertragsgröße von 12 $
- Ausrichtung an den Fälligkeitsdaten der Standard-S&P 500-Index-Optionen (SPX)
- Vorteile der Preisfindung, zentrale Abwicklung und verbesserte Zugänglichkeit
Das Redesign geht auf das Kundenfeedback ein und zielt darauf ab, einen kapitaleffizienteren und benutzerfreundlicheren Ansatz für den Handel mit Varianz im aktuellen regulatorischen Umfeld zu bieten.
- Introduction of a simplified approach to variance trading and settlement
- Potential for increased market participation due to exchange-listed format
- Alignment with S&P 500 Index options expiration dates for enhanced flexibility
- Improved capital efficiency and user-friendliness compared to previous offerings
- Potential for growth in Cboe's derivatives product lineup
- Subject to regulatory review, which could potentially delay or alter the launch
- Success dependent on market adoption and liquidity of the new product
Insights
The introduction of the redesigned Cboe S&P 500 Variance Futures represents a significant development for market participants. This product brings OTC variance swaps into an exchange-listed framework, offering benefits like price discovery, central clearing and enhanced liquidity. The redesigned contract, with its simplified methodology and alignment with SPX options, promises easier calculations and position management. This could lead to increased participation from institutional investors who seek to hedge volatility risks or express directional views. Furthermore, the shift towards exchange-listed products aligns with broader regulatory trends, notably the Uncleared Margin Rules, which have raised costs for OTC derivatives. This development potentially reduces operational complexities and capital requirements, making it a highly favorable option in the current regulatory environment.
From a market perspective, the launch of the new Cboe S&P 500 Variance Futures is poised to create a more accessible and efficient tool for managing volatility. By addressing previous feedback and leveraging a straightforward methodology, Cboe aims to increase product adoption. The contract’s smaller size and simpler structure could attract a broader range of market participants, including those who may have previously been deterred by the complexity of variance swaps. The timing aligns well with increasing demand for transparent and regulated trading instruments and the alignment with standard SPX options adds a layer of convenience for trading strategies. Overall, this relaunch could enhance Cboe’s competitive edge in volatility products and drive greater trading volumes on its platform.
The technical improvements in the new Cboe S&P 500 Variance Futures are noteworthy. The use of a calculation based on the annualized realized variance of the S&P 500 Index, coupled with a streamlined methodology for quoting and trading in variance units, reflects a thoughtful redesign. These enhancements address previous challenges in trading and settlement, making the product more user-friendly and efficient. The alignment with SPX options settlement dates offers precise hedging capabilities, which could be a game-changer for sophisticated trading strategies. Additionally, the product’s simplicity in calculations and position management could drive technology adoption among trading platforms, thereby increasing market accessibility and participation.
- Newly redesigned product aims to bring OTC variance swaps trading to the exchange-listed market
- Simplifies trading and settlement, while offering benefits of price discovery, central clearing and liquidity
- Product addresses customer feedback and improves upon Cboe's previous variance futures offerings
The Cboe S&P 500 Variance Futures contracts will settle based on a calculation1 of the annualized realized variance of the S&P 500 Index. The realized variance will be calculated once each day from a series of values of the S&P 500 Index beginning with the closing index value on the first day a VA futures contract is listed for trading and ending with the special opening quotation (SOQ) of the S&P 500 Index on the final settlement date of that contract.
Cboe's new VA futures aim to introduce a simplified approach to variance trading and settlement, providing an exchange-listed alternative to over-the-counter (OTC) variance swaps. Market participants may use these futures in connection with calculating forward implied volatility, managing and hedging against volatility risks, or expressing directional views. Trading within a regulated and transparent on-exchange environment, VA futures are designed to also provide market participants with the additional benefits of price discovery, central clearing and an easily accessible structure.
Cboe introduced its first S&P 500 variance futures product in 2004, followed by several iterations in the following years. The latest product improves upon Cboe's previous offerings and aims to address feedback from a broad spectrum of market participants. As such, the redesigned futures leverage a more straightforward methodology and will quote and trade directly in variance units with a contract size of
"Our relaunch of Cboe S&P 500 Variance Futures is another example of Cboe continually refining its offerings to meet customer demand," said Rob Hocking, Head of Product Innovation at Cboe. "Following our previous variance products, we have engaged in close dialogue with our clients to gather insights that have been instrumental in shaping this new iteration. We believe this new version will be more accessible, capital-efficient and user-friendly, providing a way to more easily replicate OTC variance swap exposures without the operational complexities. Additionally, the final phases of the Uncleared Margin Rules have increased the costs of holding OTC derivatives for some market participants. Given the broader regulatory landscape, we believe the current environment is ideal for this relaunch."
"The new iteration of the Cboe S&P 500 Variance Futures contract reinforces the S&P 500's ongoing strength as the best single gauge of the
The new VA futures will be exclusively listed and traded on Cboe Futures Exchange, LLC (CFE), joining other prominent volatility futures, such as Cboe Volatility Index (VIX) futures and the planned launch of Weekly Options on Cboe Volatility Index Futures and Cboe S&P 500 Dispersion Index (DSPX) futures, subject to regulatory review.
Cboe will be hosting a webinar on the key benefits and opportunities provided by the new Cboe S&P 500 Variance Futures on Tuesday, July 23 at 8:30am ET. To register for the webinar, please click here. For more information about Cboe S&P 500 Variance Futures, please visit: Cboe S&P Variance Futures.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across
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1 For more information on the calculation of the final settlement value, please refer to the Product Specifications for Cboe S&P 500 Variance Futures on Cboe's website here.
2 Multiplied by the futures price
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FAQ
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