CHICAGO and BOCA RATON, Fla., March 12, 2014 /PRNewswire/ -- Chicago Board Options Exchange® (CBOE®) today announced that it plans to launch trading of options with weekly expirations on the CBOE Short-Term Volatility IndexSM (ticker symbol: VXSTSM) on Thursday, April 10, pending regulatory approval.
The CBOE Short-Term Volatility Index and CBOE Volatility Index® (VIX Index®) are complementary. Like the VIX Index, the VXST Index reflects investors' consensus view of expected stock market volatility using CBOE's proprietary VIX methodology. Both indexes use S&P 500® Index (SPXSM) options in their calculations. The VIX Index uses SPX monthly options to measure expectations of 30-day volatility, while the VXST Index uses SPX options that expire every week (including SPX WeeklysSM options) to gauge expectations of nine-day volatility. The VXST Index's shorter time horizon makes it particularly responsive to short-term volatility triggered by market events such as corporate earnings, government reports and Fed announcements.
"We view short-term volatility as the next frontier in the ongoing development of the volatility trading space. We were pleased to introduce the Short-Term VIX Index in October, Short-Term VIX futures in February, and we now look forward to launching options on VXST," CBOE Holdings CEO Edward T. Tilly said. "Our new Short-Term VIX futures and options offer some compelling trading opportunities. We foresee investors using these new volatility products to better manage near-term volatility risk, to hedge short-term positions impacted by both event-driven and unexpected market moves, and to create strategies using VXST and VIX futures and options to capture changes in volatility term structure."
The 30-day VIX Index and the nine-day VXST Index are highly correlated, but the VXST Index is generally more volatile than the VIX Index.
Short-Term VIX options and futures combine the most compelling features of SPX Weeklys options and VIX futures and options, all which established all-time average daily volume (ADV) records in 2013 that have since been surpassed in January and February. Through February, ADV for SPX Weeklys options, VIX futures and VIX options increased by 57 percent, 43 percent and 33 percent, respectively, from the same period a year ago.
CBOE is the home of volatility trading. An innovator in the volatility space and leading creator of index measures that track market volatility, CBOE currently publishes data on more than two dozen volatility-related benchmarks and strategies, including indexes that track broad-based indexes, sector and commodity-related ETFs, individual equities and others.
For more information on CBOE Short-Term Volatility Index options and futures, see www.cboe.com/VXST. Additional information on VIX futures and options, and CBOE's entire suite of volatility products, can be found at www.cboe.com/Volatility.
CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options and volatility trading through product innovation, trading technology and investor education. CBOE Holdings offers equity, index and ETP options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options and futures on the CBOE Volatility Index (the VIX Index). Other products engineered by CBOE include equity options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P BuyWrite Index (BXM). CBOE Holdings is home to the world-renowned Options Institute and www.cboe.com, the go-to place for options and volatility trading resources.
CBOE®, Chicago Board Options Exchange®, CFE®, FLEX®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWriteSM, BXMSM, Execute SuccessSM, CBOE Short-Term Volatility IndexSM, SPXSM, The Options InstituteSM, VXSTSM and WeeklysSM are service marks of Chicago Board Options Exchange, Incorporated (CBOE). 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 and CFE.
SOURCE Chicago Board Options Exchange