Cboe Global Markets, Inc. (Nasdaq: CBOE) has announced the launch of Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index (IBHY) futures on Cboe Futures Exchange (CFE).
The $8.8 trillion U.S. corporate bond market includes robust cash and exchange-traded fund (ETF) markets, but Cboe IBHY is now the only exchange-listed futures product linked to U.S. corporate bonds. Cboe IBHY futures are based on a broadbased U.S. high yield corporate bond index and are expected to bring additional liquidity and price transparency to the marketplace. The futures will allow users to hedge and mitigate high yield corporate bond credit risk, and more generally allow them to efficiently allocate to the corporate bond market and implement fixed-income trading strategies.
The price of Cboe’s IBHY futures is based on IHS Markit’s iBoxx® iShares® $ High Yield Corporate Bond Index (IBXXIBHY Index). Leveraging the deep and liquid iShares® ETF marketplace, the IBXXIBHY Index is designed to measure the performance of U.S. dollar-denominated high yield corporate debt, and offers broad coverage of the liquid U.S. high yield corporate bond universe.
In addition, Cboe today also announced plans to offer trading in Cboe® iBoxx® iShares® $ Investment Grade Corporate Bond Index (IBIG) futures beginning October 8, 2018, pending regulatory review. Cboe IBIG futures are expected to provide customers with a convenient, standardized vehicle for investment-grade fixed-income trading.
Ed Tilly, Cboe Global Markets Chairman and CEO, said:
We are excited to list Cboe IBHY futures for trading, and to further cement our role as an exchange leader and product innovator with the planned launch of Cboe IBIG futures this fall.
Through our continued collaboration with IHS Markit and Blackrock, Cboe IBHY and IBIG futures will offer exposure to key segments of the U.S. corporate bond market and provide investors with new opportunities to hedge against risk in that market.
The price of Cboe’s IBIG futures is based on IHS Markit’s iBoxx® iShares® $ Investment Grade Corporate Bond Index (IBXXIBIG Index). The IBXXIBIG Index is designed to measure the performance of U.S. dollar-denominated investment grade corporate debt, and offers broad coverage of the liquid U.S. investment grade corporate bond universe.
Cboe IBIG futures will be cash settled with a $1,000 multiplier and trade electronically on CFE during regular trading hours (8:30 a.m. to 3:15 p.m. CT). The contracts will be cleared through the Options Clearing Corporation (OCC) and regulated by the Commodity Futures Trading Commission (CFTC).