Russell Investments today announced that NYSE Euronext, one of the world's premier exchange operators and technology innovators and home of the NYSE Amex and NYSE Arca exchanges, and CBOE Holdings, Inc., home of Chicago Board Options Exchange (CBOE), the creator of listed options and leader in index options trading volume, will trade Russell U.S. Index-based options exclusively. Russell Indexes, which are used as benchmarks by nearly 70% of U.S. institutional equity investors (as of 12/31/11), believes that this semi-exclusive, dual-listing strategy will allow it to fully harness the complementary strengths of these two leading exchange operators in U.S. options. The semi-exclusive trading in Russell Index-based options will begin in late April.
This new alignment leverages the unique strengths of the NYSE Euronext and CBOE Holdings U.S. options platforms, providing the potential for increased support and education around the five Russell Indexes on which options are based and listed today. Russell believes that this focus will enable the organizations to expand the variety of Russell Index-based options and enhance educational resources to benefit investors and traders on both exchanges. Options on the well-known Russell 2000® Index of small-cap U.S. stocks (RUT) were previously listed on several U.S. exchanges.
"Our new more focused alignment with NYSE Euronext and the CBOE will allow the Russell family of global indexes to expand the options products and services based on Russell Indexes available to clients globally," said Ron Bundy, CEO of Russell Indexes. "Joining forces with these two very unique and complementary organizations is consistent with our goal to expand our reach, increase our focus and build our service capabilities for multi-asset investors and traders around the world."
Russell Indexes and NYSE Euronext announced a new global alliance in January, which spans three distinct NYSE Euronext business lines and multiple geographies, as well as several facets of Russell's global index business. The January agreement included the transition of RussellTick™, an index feed for real-time, intra-day values for the Russell family of indexes in the U.S. and globally, to NYSE Technologies' Global Index Feed (GIF) as well as a commitment to develop additional joint global services and products, such as new index-based options.
"NYSE Euronext has built a world-class portfolio of products and services on two distinctly customer-focused exchanges designed to encourage growth and create opportunity for investors," said Steve Crutchfield, Executive Vice President and Head of U.S. Options at NYSE Euronext. "We are very excited to work with Russell Indexes to help advance their dynamic business with our highly complementary services and industry-leading exchanges."
The new agreement will also enhance Russell Indexes educational capabilities through closer alignment with CBOE Holdings. CBOE, which pioneered the use of listed options 40 years ago in 1973 and introduced listed index options in 1983, is known as the world's leading source for options education. CBOE's world-renowned Options Institute helps institutional and retail investors increase their understanding of options and the role they can play in portfolio and risk management.
"We are delighted to extend our long-standing partnership with Russell Indexes under this semi-exclusive agreement as we collaborate to grow the universe of index options users," CBOE Holdings Chairman and CEO William J. Brodsky said. "As the creator of stock index options 30 years ago and the industry leader in index options trading, CBOE maintains a broad network of market makers that generate enormous pools of liquidity for small, medium and large-cap index investors and traders. This liquidity is very important to Russell Index options users."
