CBOE Futures Exchange plans to list futures with weekly expirations on the CBOE Volatility Index (VIX Index) beginning Thursday, July 23, 2015, subject to regulatory review. VIX Weeklys options at CBOE are expected to follow, also subject to regulatory approval.
The VIX Index is based on real-time prices of options on the S&P 500 Index (SPX) and is designed to reflect investors' consensus expectations for 30-day stock market volatility. Standard VIX futures and options expire monthly. Weekly VIX futures and options expirations offer convergence to the VIX cash index four to five times per month, instead of once a month. Generally, the closer VIX futures and options get to expiration, the closer they tend to parallel the underlying VIX Index.
"We're pleased to launch VIX Weeklys futures, giving investors a new way to trade the world's premier benchmark of equity market volatility," says CBOE Holdings CEO Edward T Tilly (pictured). "The addition of VIX weekly expirations to standard monthly expirations offers volatility exposures that more closely track the performance of the VIX Index. VIX Weeklys futures will give investors more opportunities to trade VIX and greater trading precision when responding to breaking news and economic events."
CBOE pioneered the concept of 'Weeklys' in 2005 and today they are among the industry's fastest-growing products. Contracts with weekly expirations allow investors to implement more targeted buying, selling, spreading and hedging strategies.
New weekly expirations for VIX futures will be listed on Thursdays (excluding holidays) and expire on Wednesdays. CFE may list up to six consecutive weekly expirations for VIX Weeklys futures. VIX Weeklys futures will be available during CFE's regular and extended trading hours.
