Cboe Announces Planned Launch of Options on VIX Futures
Cboe Global Markets, Inc. announced plans to launch options on Cboe Volatility Index (VIX) futures. The new options on VIX futures (VX) are expected to begin trading on Cboe Futures Exchange, LLC on October 14.
Cboe currently provides securities-based VIX Index options, allowing investors to manage or gain exposure to broad US equity market volatility. The new options will be comparable in functionality but will be based on front-month VIX futures.
With futures as the underlying asset, these options will be CFTC-regulated, allowing a diverse range of market participants who are unable to access U.S. securities-based options to use this product to express their views on volatility.
“Given the increased trading activity we’re seeing in VIX options and the strong demand for hedging tools this year, we’re especially excited to expand our volatility toolkit to include these new options on VIX futures and our planned relaunch of variance futures coming in late September,” said Rob Hocking, head of product innovation at Cboe.
Options on VIX futures will be European-style, which can only be exercised at expiration, and will physically settle into front-month VIX futures.