CBOE to Launch Options on Volatility Indexes of Individual Stock and Crude Oil ETFs

Tradable Volatility Products to Expand to More Sectors

Mar 16, 2011, 08:15 ET from Chicago Board Options Exchange

CHICAGO and BOCA RATON, Fla., March 16, 2011 /PRNewswire/ -- The Chicago Board Options Exchange (CBOE) today announced that it has filed for Securities and Exchange Commission (SEC) approval to list options based on recently-created volatility indexes that track individual stocks – Apple (AAPL), Amazon (AMZN), Goldman Sachs (GS), Google (GOOG), and IBM (IBM) – using CBOE's widely-followed CBOE Volatility Index (VIX) methodology.  

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"Stock VIXes," first introduced in January as volatility benchmarks, have allowed investors to track individual stock volatility with a quantifiable measurement for the first time.  Pending regulatory approval, investors will have the ability to trade options contracts based on the volatility component of the individual stock.

In addition, CBOE's rule filing would permit the trading of options on the CBOE Crude Oil ETF Volatility Index (OVX), based on United States Oil Fund (USO) options. The CBOE Crude Oil ETF Volatility Index (OVX) has been calculated and disseminated by the CBOE since 2008 and, pending approval, will have a tradable contract tied its benchmark, allowing investors to hedge the risk of volatility in the active oil sector for the first time.

"As the pioneer in the volatility space, CBOE is committed to developing a wide variety of innovative tools that can help investors measure and potentially mitigate, volatility in their portfolios," CBOE Chairman and CEO William J. Brodsky said.  "Our benchmark indexes and strategies, combined with our volatility futures and options products, have become broadly recognized and accepted by investors, and these new products will provide even more ways to manage volatility across a variety of asset classes."  

In the SEC filing, CBOE requested the ability to list options on up to 40 different volatility benchmarks of individual equities and certain exchange traded funds (ETFs) that could be created by CBOE.  The products announced today are the first of those 40 products.

CBOE Futures Exchange (CFE) also plans to list futures contracts on volatility benchmarks that have been approved for options trading, but has not yet filed with the Commodity Futures Trading Commission (CFTC) for approval.  

CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options trading through product innovation, trading technology and investor education. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options on the CBOE Volatility Index (VIX). Other products engineered by CBOE include equity options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P 500 BuyWrite Index (BXM). CBOE's Hybrid Trading System incorporates electronic and open-outcry trading and is powered by CBOEdirect, a proprietary, state-of-the-art electronic platform that also supports C2 Options Exchange (C2), CBOE Futures Exchange (CFE), CBOE Stock Exchange (CBSX) and OneChicago. CBOE is home to the world-renowned Options Institute and www.cboe.com, named "Best of the Web" for options information and education.

CBOE, a wholly-owned subsidiary of CBOE Holdings, Inc. (Nasdaq: CBOE), is regulated by the Securities and Exchange Commission (SEC), with all trades cleared by the AAA-rated Options Clearing Corporation (OCC).

This press release contains statements which may be considered forward-looking statements within the meaning of the Securities Exchange Act of 1934, including, without limitation, statements regarding operating strategies, future plans and financial results. Forward-looking statements may be accompanied by words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "intend", "may", "possible", "predict", "project" or similar words, phrases or expressions. The Company does not undertake any obligation to update the information contained herein, which speaks only as of the date of this press release. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 under the heading "Forward-Looking Statements" and/or "Risk Factors". Such discussions regarding risk factors and forward-looking statements are incorporated herein by reference.

CBOE®, Chicago Board Options Exchange®, CBSX®, CBOE Stock Exchange®, CFE®, CBOEdirect®, FLEX®, Hybrid®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWrite(SM), BXM(SM), SPX(SM), CBOE Futures Exchange(SM) C2(SM), C2 Options Exchange(SM), EVZ(SM), OVX(SM), and The Options Institute(SM) are servicemarks 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.   All trademarks and servicemarks are the property of their respective owners.



SOURCE Chicago Board Options Exchange