Cboe Global Markets Sees Strong Debut for New Mini VIX Futures
Cboe Global Markets launched its Mini Cboe Volatility Index futures (ticker symbol: VXM) on August 9, 2020, with nearly 127,000 contracts traded in the first week. The product caters to a wide range of investors by offering a smaller contract size, requiring less capital while providing similar exposure to standard VIX futures. The trading volume peaked at 32,475 contracts on August 14. Arianne Criqui, Head of Derivatives at Cboe, expressed satisfaction with the initial customer participation, highlighting strong demand for volatility management tools.
- Strong initial trading volume of nearly 127,000 contracts in the first week.
- Peaked trading volume at 32,475 contracts on August 14, indicating robust interest.
- Mini VIX futures require less capital, attracting a broader range of investors.
- Excellent market quality noted through liquidity and tight spreads.
- None.
CHICAGO, Aug. 18, 2020 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), one of the world's largest exchange holding companies, announced the successful launch of its Mini Cboe Volatility Index futures, which began trading on Cboe Futures Exchange (CFE) on Sunday, August 9 at 5:00 p.m. CT with the opening of CFE's global trading hours session.
Trading volume in the new Mini VIX futures contract (ticker symbol: VXM) totaled nearly 127,000 contracts during the first week. The launch of the new product was off to a strong start, with more than 25,000 total contracts traded on Monday, August 10 and trading continued to be active throughout the week, reaching a high mark of more than 32,000 total contracts on Friday, August 14. Approximately 23,000 contracts, or
Trading Day | Global Trading Hours Volume | Regular Trading Hours Volume | Total Volume |
Monday, August 10 | 4,800 | 20,331 | 25,131 |
Tuesday, August 11 | 2,126 | 13,888 | 16,014 |
Wednesday, August 12 | 6,459 | 16,034 | 22,493 |
Thursday, August 13 | 3,693 | 27,128 | 30,821 |
Friday, August 14 | 6,018 | 26,457 | 32,475 |
Arianne Criqui, Head of Derivatives and Global Client Services at Cboe Global Markets, said: "We are pleased with the successful launch of Mini VIX futures and encouraged by the strong customer participation we've seen early on. Trading volume has been solid and market quality – in the form of liquidity and tight spreads – has been excellent, reflecting the demand from market participants for additional tools tracking the VIX Index to gain broad market volatility exposure. Our customers have long turned to VIX futures as the preferred volatility management tool, and we believe the manageably sized, cost-effective Mini VIX futures could gain similar traction among a broad base of investors."
CFE's new Mini VIX futures contract shares the same contract terms as the standard VIX futures contract, but is 1/10th the size of the standard contract. The design of the mini contract provides similar utility as the standard contract, but its smaller size requires less capital to achieve the same exposure. Additionally, Mini VIX futures provide investors additional flexibility and precision in volatility risk management.
With the launch of the new smaller sized contract, Cboe aims to meet investor demand for a wider variety of tools to gain direct exposure to the VIX Index, as well as the growing interest in small-sized contracts for derivatives trading. The new contract builds on the success of VIX futures and further expands Cboe's suite of volatility products, offering new trading opportunities for market participants to construct their own views on volatility or to tailor their own volatility strategies using Mini VIX futures.
The utility of the Mini VIX futures contract is expected to appeal to a broad set of market participants, including Commodity Trading Advisors (CTAs), Futures Commission Merchants (FCMs), proprietary trading firms, institutional investors and sophisticated retail investors, and may provide opportunities to hedge a portfolio, employ strategies in an effort to generate returns from relative pricing differences, or express a bullish, bearish or neutral outlook for broad market implied volatility.
Introduced by CFE in 2004, VIX futures (ticker symbol: VX) provide market participants with opportunities to trade their view of the future direction of the expected volatility of the S&P 500® Index. VIX futures also help enable market participants to trade a liquid volatility product based directly on the VIX Index, helping them manage risk, generate alpha or diversify a portfolio. VIX futures are designed to reflect the market's estimate of the value of the VIX Index on various expiration dates in the future, thus providing market participants with a variety of opportunities to implement their views using volatility trading strategies. Since their launch in 2004, a total of 491.1 million VIX futures contracts have traded at CFE1.
In the coming months, Cboe expects to provide a Mini VIX futures user guide and to host webinars about Mini VIX futures. For additional information on CFE's Mini VIX futures, including contract specifications, potential strategies and product disclosure, visit: www.cboe.com/vixfutures.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) is one of the world's largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world. The company is committed to defining markets to benefit its participants and drive the global marketplace forward through product innovation, leading edge technology and seamless trading solutions.
The company offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S., Canadian and European equities, exchange-traded products (ETPs), global foreign exchange (FX) and volatility products based on the Cboe Volatility Index (VIX Index), recognized as the world's premier gauge of U.S. equity market volatility.
Cboe's subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S. In addition, the company operates one of the largest stock exchanges by value traded in Europe and is a leading market globally for ETP listings and trading.
The company is headquartered in Chicago with a network of domestic and global offices across the Americas, Europe and Asia, including main hubs in New York, London, Kansas City and Amsterdam. For more information, visit www.cboe.com.
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Cboe®, Cboe Volatility Index®, CFE®, and VIX® are registered trademarks and Cboe Global MarketsSM and Cboe Futures ExchangeSM and Mini VIXSM are service marks of Cboe Exchange, Inc. 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 Exchange, Inc. All other trademarks and service marks are the property of their respective owners.
It is important for market participants to understand the following before trading Mini VIX futures: Mini VIX futures are complicated financial products that are suitable only for sophisticated market participants. Mini VIX futures involve the risk of loss, which can be substantial and can exceed the amount of money deposited for the futures position. Market participants should put at risk only funds that they can afford to lose without affecting their lifestyles. Before transacting in Mini VIX futures, market participants should fully inform themselves about the characteristics and risks of Mini VIX futures, including in particular those described at www.Cboe.com/MiniVIX. Mini VIX futures market participants also should make sure they understand the product specifications and the methodologies for calculating the underlying VIX Index and the settlement values for Mini VIX futures.
Futures trading is not suitable for all investors and involves the risk of loss. That risk of loss can be substantial and can exceed the amount of money deposited for a futures position. You should, therefore, carefully consider whether futures trading is suitable for you in light of your circumstances and financial resources. You should put at risk only funds that you can afford to lose without affecting your lifestyle. For additional information regarding futures trading risks, see the Risk Disclosure Statement in Appendix A to CFTC Regulation 1.55(c).
Cboe Global Markets, Inc. and its affiliates do not recommend or make any representation as to possible benefits from any securities, futures or investments, or third-party products or services. Cboe Global Markets, Inc. is not affiliated with S&P. Investors should undertake their own due diligence regarding their securities, futures and investment practices. This press release speaks only as of this date. Cboe Global Markets, Inc. disclaims any duty to update the information herein. Nothing in this announcement should be considered a solicitation to buy or an offer to sell any securities or futures in any jurisdiction where the offer or solicitation would be unlawful under the laws of such jurisdiction. Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation.
Cboe Global Markets, Inc. and its affiliates, to the maximum extent permitted by applicable law, make no warranty, expressed or implied, including, without limitation, any warranties as of merchantability, fitness for a particular purpose, accuracy, completeness or timeliness, the results to be obtained by recipients of the products and services described herein, or as to the ability of the S&P 500 index to track the performance of its strategy, and shall not in any way be liable for any inaccuracies or errors. Cboe Global Markets, Inc. and its affiliates have not calculated, composed or determined the constituents or weightings of the securities that comprise the S&P 500 index and shall not in any way be liable for any inaccuracies or errors.
Cautionary Statements Regarding Forward-Looking Information
Certain information contained in this press release may constitute forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made and are subject to a number of risks and uncertainties.
1Through August 17, 2020
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SOURCE Cboe Global Markets, Inc.
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