Cboe to Enable Electronic Auction Mechanism for S&P 500 Index Options Products, Beginning February 22
Cboe Global Markets (CBOE) announced plans to activate its AIM (Automated Improvement Mechanism) for trading S&P 500 Index options (SPX) and S&P 500 Index Weeklys (SPXW) starting February 22, 2021. This move aims to cater to the growing demand from retail investors for smaller-sized trades, allowing auctions for orders of up to 10 contracts. The AIM functionality is expected to enhance execution quality and provide better access to liquidity, reinforcing Cboe's commitment to innovation in trading solutions.
- Activation of AIM for SPX and SPXW options enhances trading efficiency for retail investors.
- The introduction of auctions for small orders aligns with industry trends toward smaller average trade sizes.
- Expected improvement in execution quality and access to negotiated liquidity.
- None.
CHICAGO, Feb. 16, 2021 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced plans to enable its electronic auction mechanism to further serve market participants trading S&P 500® Index options (SPX) and S&P 500 Index WeeklysSM options (SPXW) on Cboe Options Exchange, beginning Monday, February 22.
Striving to meet the growing demand from sophisticated retail investors seeking to trade smaller-sized orders, Cboe plans to activate its electronic crossing auction functionality, AIM (Automated Improvement Mechanism), for SPX and SPXW options during regular trading hours for trades up to a maximum size of 10 contracts. Cboe's AIM auctions are currently enabled for trading in various other options classes and can be particularly valuable in providing participants with access to negotiated liquidity that is generally available in open-outcry trading. The auctions are expected to offer additional opportunities for price improvement throughout the trading day, leading to an opportunity for enhanced execution quality.
Arianne Criqui, Senior Vice President and Head of Derivatives and Global Client Services at Cboe Global Markets, said: "The momentum of the retail investor is real, and we are pleased to further expand our SPX functionality to help meet this growing demand. On average, order sizes in the options industry are trending smaller, and enabling AIM for small orders in our SPX products, much like offering a mini SPX options (XSP) contract at 1/10th the size, will afford institutions and sophisticated retail investors with enhanced functionality and flexibility to execute their SPX trades. We expect that AIM will add another powerful electronic solution that is complementary to our open-outcry trading and help contribute to an even deeper and more liquid SPX options market."
Cboe Options Exchange, a hybrid trading model that incorporates open-outcry and electronic trading features, currently offers AIM as an electronic crossing auction for market participants to execute orders, in addition to crossing executions that occur on the trading floor. AIM auctions are designed to allow participants to broadcast their orders on the Exchange for price improvement opportunities over the current market price, and to trade their orders against specified contra parties or other participants responding to the auction – thereby potentially enhancing execution rates and quality. The AIM functionality is also currently available for SPX options trading in Cboe's global trading hours session.
The S&P 500 Index is recognized worldwide as one of the premier benchmarks for the U.S. stock market's performance. Cboe offers a diverse range of SPX options products that provide investors with the tools to gain efficient exposure to the U.S. equity market and execute risk management, hedging, asset allocation and income generation strategies. Listed exclusively on Cboe Options Exchange, SPX options are among the most actively traded cash-settled equity index options listed in the U.S. For 2020, total volume for all SPX options was more than 312.9 million contracts, with average daily volume of approximately 1.2 million contracts. For more information on Cboe's suite SPX options products, visit the website.
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.
Media Contacts | Analyst Contact | |
Angela Tu | Tim Cave | Debbie Koopman |
+1-646-856-8734 | +44 (0) 7593-506-719 | +1-312-786-7136 |
atu@cboe.com | tcave@cboe.com | dkoopman@cboe.com |
CBOE-OE
CBOE-O
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX® are registered trademarks and WeeklysSM is a service mark of Cboe Exchange, Inc. Standard & Poor's®, S&P®, S&P 500®, and SPX® 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.
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 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 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 S&P 500 indexes 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.
View original content to download multimedia:http://www.prnewswire.com/news-releases/cboe-to-enable-electronic-auction-mechanism-for-sp-500-index-options-products-beginning-february-22-301229181.html
SOURCE Cboe Global Markets, Inc.
FAQ
When will Cboe enable the electronic auction mechanism for SPX options?
What is the maximum order size for AIM auctions at Cboe?
How does AIM improve trading for S&P 500 Index options?
What are the expected benefits of Cboe's AIM for investors?
What is the significance of the S&P 500 Index in trading?
