"As the derivatives markets continue to become more sophisticated, CBOE is continuing to stay ahead of the curve by bringing innovative products to the marketplace. The growth potential for CBOE's volatility products is tremendous, and as investors better understand the importance of hedging volatility risk, we expect volume will continue to grow," said CBOE Chairman and CEO William Brodsky. "The 12-month Variance Futures further expands volatility hedging and trading opportunities."
"The advantages of CFE's suite of volatility products will especially appeal to over-the-counter traders looking for the convenience and ease of execution that exchange traded products provide," said CFE Managing Director Patrick Fay. "The addition of 12-month S&P 500 Variance contract to CFE's line-up of products offering the advantages of transparency, standardized terms, and the backing of a triple-A rated clearing house, will improve the ability of all investors to effectively manage volatility risk."
CBOE S&P 500 Twelve-Month Variance Futures are based on the realized variance of the S&P 500 Composite Stock Price Index ("S&P 500"). The final settlement value for the contract will be determined based on a standardized formula for calculating the twelve-month realized variance of the S&P 500.
CBOE launched VIX futures in March 2004, and today volume averages about 18,000 contracts per day, with open interest of about 20,000 contracts. CBOE recently launched options on the VIX, and in the first two weeks of trading volume has totaled more than 94,000 contracts, with open interest standing at about 85,000 contracts.
The CBOE Futures Exchange is a wholly-owned subsidiary of Chicago Board Options Exchange, Incorporated, offering an all-electronic exchange, open access market model, with traders providing liquidity and making markets. Currently, CFE lists 25 futures contracts, including futures on the CBOE Volatility Index, "VIX," Gas at the Pump, CBOE China Index, and 12 sector Indexes, called Power Packs. CFE is regulated by the Commodity Futures Trading Commission (CFTC). More information on CFE and its products, including contract specifications, can be found at: www.cboe.com/CFE.
CBOE, the world's largest options marketplace and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, visit the CBOE website at: http://www.cboe.com/
