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Cboe Global Markets launches new corporate bond futures options and trading times

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Cboe Global Markets is expanding its corporate bond index product suite with two new offerings – new options on Cboe iBoxx iShares $ High Yield Corporate Bond Index futures and Cboe iBoxx iShares $ Investment Grade Corporate Bond Index futures, and extended trading hours for IBHY and IGIB futures.

The new options will be available from 10 July, while the extension to almost 24-hour per weekday trading will happen in the third quarter of 2023.

The $10.4 trillion US corporate bond market includes cash and exchange-traded fund (ETF) markets, with CFE’s IBHY and IBIG as the only exchange-listed futures products linked to US corporate bonds. 

Cboe says CFE’s futures and options on futures products can offer broad coverage of the US corporate bond universe and allow users to hedge and mitigate corporate bond credit risk, and more generally allow them to efficiently allocate to the corporate bond market and implement fixed-income trading strategies. 

Options on IBHY futures will be options on the underlying IBHY futures. The price of IBHY futures is based on the iBoxx iShares $ High Yield Corporate Bond Index (IBXXIBHY Index), which is designed to measure the performance of US dollar-denominated high yield corporate debt. 

Options on IBIG futures will be options on the underlying IBIG futures. The price of IBIG futures is based on the iBoxx iShares $ Investment Grade Corporate Bond Index (IBXXIBIG Index), which is designed to measure the performance of US dollar-denominated investment grade corporate debt.

The new IBYO and IBGO options will have American-style exercise, will be physically-settled, will have PM settlement and will trade electronically on CFE during regular trading hours, from 9:30am to 4:00pm ET. The contracts will be cleared through OCC and be regulated by the Commodity Futures Trading Commission (CFTC). 

The extended trading to global hours is planned for IBHY and IBIG futures only and will cover a 23-hour time period per weekday from Monday to Friday. The extended trading hours session begins the prior day at 6:00pm ET and runs until 9:30 am ET of the current day (trading for the Monday trading day would begin Sunday evening). 

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