CHICAGO, Nov. 11, 2020 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced that Cboe Global Indices, LLC has expanded its family of Target Outcome Indices with the addition of two new series of indices tied to the Russell 2000 Index: the Cboe Russell 2000 Enhanced Growth Index Series (RPEN) and Cboe Russell 2000 Buffer Protect Index Series (RPRO).
Target Outcome Indices are options-based strategy benchmarks that are designed to provide targeted returns relative to a referenced U.S. domestic stock market index and in some cases (buffer protect strategies), to limit downside risk.
The new Cboe Russell 2000 Target Outcome Indices measure the performance of a hypothetical portfolio of FLexible EXchange® (FLEX®) Options that aim to provide exposure to the Russell 2000 Index, where the downside protection, upside growth potential and outcome period are all pre-determined. FLEX Options are customizable contracts that allow users to specify key contract terms, including strike prices, exercise styles and expiration dates.
Bruce Traan, Head of Cboe Global Indices, said: "Cboe's Target Outcome Indices have enabled the launch of a new category of financial products with pre-defined investment objectives and risk-return parameters, based on strategic investments in FLEX Options. We are pleased to roll out additional indices tied to the widely followed Russell 2000 Index, further broadening our suite of Target Outcome Indices supporting the growing interest of options-based strategies that provide a combination of growth potential and downside risk mitigation."
Each of the new indices tracks the return of a hypothetical investment portfolio designed to generally track the Russell 2000 Index but that, over a one year outcome period, either provides protection against the first 10 percent of losses due to a decline in the Russell 2000 Index (buffer protect strategy) or provides 2x the appreciation of the Russell 2000 Index up to a cap level (enhanced growth strategy). The cap level is determined on each annual option roll date.
Buffer protection target outcome strategies can be used as a risk management tool, or tactically, in bear or range-bound markets, while enhanced growth target outcome strategies can be used in most market environments as long-term growth tools, or tactically, in modest bull or range-bound market environments.
Catherine Yoshimoto, Director, Product Management, FTSE Russell, said: "FTSE Russell has a strong relationship with Cboe and is pleased to continue our collaboration in the target outcome indexing space. Leveraging our combined strengths in index development and derivatives trading, the new indices provide an innovative way for investors to gain defined exposures to the Russell 2000 Index – one of the world's most widely recognized benchmark for small-cap U.S. equities."
The Cboe Russell 2000 Enhanced Growth Index Series (RPEN) and Cboe Russell 2000 Buffer Protect Index Series (RPRO) each include a series of 12 monthly indices comprised of hypothetical investments FLEX Options that are rolled into new positions at annual expirations. A composite index is compiled giving equal weight to the returns of the 12 monthly indices. For additional information about Cboe's family of Target Outcome Indices, please visit https://www.cboe.com/index.
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.
Cboe® Cboe Volatility Index®, VIX®, FLexible EXchange®, FLEX® 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, Russell 1000®, Russell 2000®, Russell 3000® and Russell MidCap® 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.
SOURCE Cboe Global Markets, Inc.