CBOE Launches ETF-Based Volatility Index Products | ETF Trends

The Chicago Board Options Exchange and CBOE Futures Exchange are launching ETF-based volatility index products.

The CBOE is the largest U.S. derivatives trading platform.

“We continue to see tremendous interest in trading VIX options and futures and our other volatility-related products and are committed to building our volatility franchise to meet this investor demand. Expanding our roster of volatility options and futures products into sectors such as emerging markets is the next step in this evolution,” William J. Brodsky, CBOE Holdings chairman and CEO, said. [BRICs Lead Emerging Market ETFs]

The exchange currently has the CBOE Brazil ETF Volatility Index, which takes the VIX methodology and applies it to the CBOE-listed options contracts on the iShares MSCi Brazil Index (NYSEArca: EWZ). According to the exchange, the options on EWZ were some of the most traded contracts on CBOE in 2011, reports The Options Insider. [Currency ETF Chart of the Day: Brazil]

The new products hitting the market include:

  • CBOE Brazil ETF Volatility Index Securities Futures (VXEW) debuted Feb. 21
  • CBOE Brazil ETF Volatility Index Options (VXEWZ) debuts March 6

Cinthia Murphy for Index Universe reports that the roll-outs were designed to meet strong investor demand, and to help CBOE cast a wider net and tap into emerging markets. [Three Things You Should Know About VIX ETFs]

Currently, the exchange offers more than two dozen indexes and products, with the most popular being the CBOE Volatility Index, or VIX, which is used as a bellwether for risk in the stock market.

Tisha Guerrero contributed to this article

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.