Introducing Nanos by Cboe, Smaller and Simpler Options Designed for Retail Traders
Cboe Global Markets (CBOE) has announced the launch of Nanos by Cboe, a new options contract aimed at making options trading accessible to retail traders. Set to debut with S&P 500 Index options in Q1 2022, Nanos contracts are significantly smaller, allowing traders to start small while developing their skills and confidence. This initiative addresses the barriers faced by retail investors due to standard contract sizes. Cboe also plans to complement this launch with an educational curriculum through the Cboe Options Institute.
- Launch of Nanos by Cboe to simplify options trading for retail traders.
- Nanos contracts are 1/100th the size of standard options, enhancing accessibility.
- Enhancement of educational resources through the Cboe Options Institute.
- None.
CHICAGO, Oct. 27, 2021 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to launch Nanos by Cboe, a first of its kind options contract designed to simplify options trading. Nanos by Cboe help make options trading accessible for the everyday retail trader, allowing them to start small, learn as they go and grow their trading confidence.
Cboe plans to launch its first Nanos on the S&P 500 Index in first-quarter 2022. At a fraction of the size of a standard options contract, the one-multiplier, cash-settled Nanos S&P 500 contract answers the growing demand for a simpler, cost-effective way to gain broad exposure to the U.S. equity market. At 1/100th the size of an XSP1 option, the Mini-S&P 500 Index options contract, Nanos S&P 500 (ticker symbol: NANOS) help simplify the process of trading options, letting traders focus on understanding the market and refining their trading strategies.
The S&P 500 Index (SPX) options market is one of the most highly traded and liquid options markets across the globe and has served primarily institutional investors well for years, however, the higher price of a standard option contract can be a barrier to entry for retail traders. The smaller size of Nanos may help beginners gain confidence as they learn and apply basic trading strategies, utilize simplified analytics when identifying and sizing trades, and continue on a learning path.
"Our goal with Nanos is to use education to inspire and empower new market participants to pursue a sustainable financial future. We believe Nanos are more appropriately sized for retail traders and enable traders to better express their opinions on market movements at a comparatively lower premium price," said Ed Tilly, Chairman, President and CEO of Cboe Global Markets. "Through our Nanos S&P 500 product, we are broadening access to a greater universe of traders who can enjoy the potential benefits options provide, including hedging, asset allocation and income generation strategies."
Listed options are a time-tested and valuable investment tool that allow market participants to gain market exposure and manage their risk, however, it is important that new investors understand how to use options products and the potential risks2. To complement the launch of Nanos, the Cboe Options Institute plans to offer a new options introductory curriculum tailored to retail traders.
"Cboe Global Markets has a long-standing commitment to education, which better enables all types of investors to access our markets, understand our products and potentially benefit from our solutions," said Rob Hocking, Head of Derivatives Strategy at Cboe. "We are continuously evolving our education programs to offer more retail-centric content through the Options Institute, and we are thrilled to welcome a new generation of investors to options trading with the launch of Nanos."
The Nanos S&P 500 product complements Cboe's exclusive suite of S&P DJI Index options, which include S&P 500® Index (SPX) options, with A.M. and P.M. settled weekly and monthly expiring contracts, Mini-S&P 500 Index (XSP) options (which are one-tenth the size of SPX options), with P.M. settled weekly and monthly expiring contracts, and options on the S&P 500 ESG Index options and certain S&P Select Sector Indices with monthly expiring contracts. The creation of these new smaller contracts will provide market participants with additional tools to execute their U.S. large-cap equity trading strategies. Similar to standard SPX options, Nanos S&P 500 will be structured as European-style options (no early exercise) and cash-settled (no delivery or assignment of shares) at expiration with P.M. settlement. For additional information on Nanos by Cboe, visit www.cboe.com/nanos.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE), a leading provider of market infrastructure and tradable products, delivers cutting-edge trading, clearing and investment solutions to market participants around the world. The company is committed to operating a trusted, inclusive global marketplace, providing leading products, technology and data solutions that enable participants to define a sustainable financial future. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives and FX, across North America, Europe and Asia Pacific. To learn more, visit www.cboe.com.
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Cboe®, Cboe Global Markets®, Cboe Volatility Index®, FLEX®, VIX®, ®, and XSP® are registered trademarks and NanosSM, nanos by CboeSM, Cboe NanoSM, Nano OptionsSM, Options InstituteSM are service marks of Cboe Exchange, Inc. or its affiliates. The S&P 500 Index is proprietary to S&P Dow Jones Indices LLC. S&P®, S&P 500® and SPX® are registered trademarks of Standard & Poor's Financial Services, LLC and have been licensed for use with the S&P 500 Index by Cboe Exchange, Inc. Cboe Exchange's options on the S&P 500 Index are not sponsored, endorsed, marketed or promoted by S&P Dow Jones Indices and S&P Dow Jones Indices does not have any liability with respect thereto. All other trademarks and service marks are the property of their respective owners. © 2021 Cboe Exchange, Inc. All rights reserved.
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.
Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 (investorservices@theocc.com). The information in this document is provided for general education and information purposes only. No statement(s) within this document should be construed as a recommendation to buy or sell a security, or to provide investment advice. Supporting documentation for any claims, comparisons, statistics or other technical data in this document is available by contacting Cboe Global Markets at www.cboe.com/contact. Past performance is not predictive of future returns.
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.
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Some factors that could cause actual results to differ include: the impact of the novel coronavirus ("COVID-19") pandemic, including changes to trading behavior broadly in the market; the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes; our ability to protect our systems and communication networks from security risks, cybersecurity risks, insider threats and unauthorized disclosure of confidential information; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; fluctuations to currency exchange rates; our index providers' ability to maintain the quality and integrity of their indices and to perform under our agreements; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to attract and retain skilled management and other personnel; our ability to minimize the risks, including our credit and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; our ability to manage our growth and strategic acquisitions or alliances effectively; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; and the accuracy of our estimates and expectations. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2020 and other filings made from time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
1 Nanos by Cboe trade on Cboe as a micro-option (with 1/100th the value of a standard option) on the Mini-S&P 500 Index, which is 1/10th the value of the S&P 500 Index.
2 While capital risk for a Nanos contract holder is limited to the price of the premium and is thus reduced relative to the same number of standard contracts, the capital risk associated with writing Nanos by Cboe contracts remains open-ended. In addition to the premium price, a contract holder may also need to pay applicable fees and commissions.
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SOURCE Cboe Global Markets, Inc.
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