Cboe Futures Exchange to launch mini VIX Futures from August

Global exchange holding company Cboe Global Markets, Inc. announced its plans to begin trading in Mini Cboe Volatility Index (VIX) futures on Cboe Futures Exchange (CFE) from 10 August 2020.

The new contract builds on the VIX futures’ success and responds to investors’ demand for wider variety of tools to gain direct exposure to the VIX Index.

New Mini VIX futures will be structured like the standard VIX futures contract but will be one tenth of its size with a $100 multiplier. The smaller notional value of the mini contract aims add flexibility in volatility risk management and greater precision in allocation among smaller, managed accounts. This is expected to appeal to a broad set of market participants, including Commodity Trading Advisors (CTAs), Futures Commission Merchants (FCMs), proprietary trading firms, institutional investors, as well as sophisticated retail investors.

Cboe Global Markets

Ed Tilly, Chairman, President and Chief Executive Officer of Cboe Global Markets, said:

Edward T. Tilly

Edward T. Tilly
Source: Cboe.com

As the pioneer of the VIX Index and volatility trading, Cboe is pleased to further expand our VIX product suite with a mini contract that aims to bring VIX futures trading to a larger universe of investors and serve a variety of investment needs. Designed to provide broad market volatility exposure in a more manageably sized, cost effective contract, the flexibility of Mini VIX futures may also create new trading opportunities and offer additional tools for market participants to construct their own views on volatility or to tailor their own volatility strategies using Mini VIX futures.

VIX futures were introduced by CFE in 2004. They provide market participants with opportunities to trade their assessment of the future direction of the expected volatility of the S&P 500® Index. VIX futures also enables market participants to trade a liquid volatility product based directly on the VIX Index, assisting them with risk management, generating alpha or diversify a portfolio.

VIX futures are tailored to reflect the market’s estimate of the value of the VIX Index on different expiration dates in the future, providing market participants with opportunities to implement their views using volatility trading strategies. A total of 486.5 million VIX futures contracts have traded at CFE since their launch.

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