Cboe Options Exchange to List Mini-Russell 2000 Index Options in First Quarter 2021
Cboe Global Markets (CBOE) will launch Mini-Russell 2000 Index options on the Cboe Options Exchange in Q1 2021, pending regulatory approval. This initiative aims to enhance market access for various participants by offering a smaller contract size—one-tenth of the standard option—catering to retail and institutional investors. The project highlights Cboe's collaboration with FTSE Russell and is expected to increase trading liquidity and participation in the U.S. small-cap equity market. Average daily volumes for Russell 2000 options are around 34,000 contracts, with total open interest exceeding 822,000 contracts.
- Launch of Mini-Russell 2000 options could enhance trading efficiency with smaller contract sizes.
- Addresses growing demand for smaller-sized derivatives, appealing to a broader range of market participants.
- Potential to increase overall investor participation and enhance liquidity in Russell 2000 options market.
- None.
CHICAGO, Dec. 17, 2020 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced plans to launch trading in Mini-Russell 2000® Index options on Cboe Options Exchange in the first quarter of 2021, subject to regulatory review.
With the planned addition of new mini options on the Russell 2000 Index, Cboe continues to expand its offerings of smaller-sized, tradable index products that help enable market participants to gain more efficient and cost-effective exposure to the broad U.S. equity market. The planned launch also underscores Cboe's longstanding relationship with FTSE Russell, building upon its successful franchise of index-based, cash-settled options tied to the FTSE Russell global indices.
New Mini-Russell 2000 Index options (ticker symbol: MRUT), which are subject to regulatory review, will be structured like standard Russell 2000 Index options, but will feature a smaller contract that is one-tenth the size of the standard contract, making them the same size as comparable ETF options. The smaller notional value of the mini contract is designed to provide market participants with a more precise way to hedge or gain direct exposure to the Russell 2000 Index. The more manageably sized, P.M.-settled contract is expected to appeal to a diverse range of participants, including sophisticated retail traders and small- or mid-sized institutional investors seeking greater flexibility when managing U.S. small-cap equity market risk and volatility or allocating among accounts.
Arianne Criqui, Head of Derivatives and Global Client Services at Cboe Global Markets, said: "Based on the strong customer interest and growing demand we are seeing for smaller-sized derivatives contracts, we are pleased to offer mini options on the Russell 2000 Index, making a valuable trading tool more readily available for both large and small market participants. With a growing suite of mini products designed to meet the needs of a new generation of investors, Cboe continues to lead the industry and drive forward the next wave of innovation in options trading."
Waqas Samad, Group Director of Information Services at London Stock Exchange Group and CEO of global index provider FTSE Russell, said: "We are excited to continue to build on our collaboration with Cboe Global Markets to extend investor reach and access to derivative tools based on the Russell 2000 Index, the index of choice for U.S. small-cap investors. This enhanced access to U.S. small-cap stocks for global investors is incredibly timely given the current state of the global economic recovery and the recent history-making performance of this important asset class."
Similar to the standard Russell options, Mini-Russell options will be structured as European-style options (no early exercise) and cash-settled at expiration. Cboe expects the launch of Mini-Russell options to potentially facilitate overall investor participation in the market for Russell 2000 options, which should, in turn, help to further enhance the depth and liquidity of the market to the benefit of investors.
The Russell 2000 Index is the world's premier benchmark measuring the performance of the small-cap segment of the U.S. stock market. Standard monthly Russell options were first offered at Cboe in 1992 and continue to be one of the five most liquid cash-settled equity index options listed in the U.S. For the year to date1, average daily volumes for Russell 2000 Index options traded at Cboe were approximately 34,000 contracts with total open interest standing at over 822,000 contracts.
For additional information on Cboe's new Mini-Russell options and its broader franchise of FTSE Russell-based index options, visit https://www.cboe.com/mrut.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) provides cutting-edge trading and investment solutions to market participants around the world. The company is committed to defining markets 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 owns EuroCCP, a leading pan-European equities clearing house. Cboe also 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®, VIX®, and Cboe Global Markets® are registered trademarks of Cboe Exchange, Inc. All other trademarks and service marks are the property of their respective owners. Russell and Russell 2000® are registered trademarks of the Frank Russell Company, used under license.
Cboe Global Markets, Inc. and its affiliates do not recommend or make any representation as to possible benefits from any securities or investments, or third-party products or services. Investors should undertake their own due diligence regarding their securities and investment practices. This press release speaks only as of this date. Cboe 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 in any jurisdiction where the offer or solicitation would be unlawful under the securities 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 FTSE Russell indexes to track the performance of the general market or any segment thereof, 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 FTSE Russell indexes and shall not in any way be liable for any inaccuracies or errors.
1 Through December 16, 2020
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SOURCE Cboe Global Markets, Inc.
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