CBOE launches new cash-settled options on Russell 1000 indexes

In tune with plans, on Tuesday – October 20th, CBOE Holdings, Inc (NASDAQ:CBOE) launched new cash-settled options on three indexes – Russell 1000® Index (RUI), Russell 1000® Growth Index (RLG), and Russell 1000® Value Index (RLV).

The rollout of the new instruments is a part of a licensing agreement sealed by CBOE and London Stock Exchange Group (LSEG) in February 2015. Under the agreement, CBOE became the exclusive US provider of options on a variety of LSEG-owned FTSE Russell indexes.

The new instruments give investors access to additional segments of the US equity market.

  • Russell 1000® Index (RUI) – is preferred by many investment managers as a broad-based index that represents approximately 92% of the total U.S. equity market.
  • Russell 1000® Growth Index (RLG) – measures the performance of those Russell 1000 companies determined to have higher price-to-book ratios and higher forecasted growth values.
  • Russell 1000® Value Index (RLV) – measures the performance of those Russell 1000 companies determined to have a lower price-to-book value and lower expected growth values.

The advantages of the instruments include: large contract size (approximately ten times the size of comparable ETF options), European-style exercise, as well as cash-settlement. The latter means no unwanted delivery or assignment of shares.

To view the official announcement from CBOE, click here.

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CBOE launches new cash-settled options on Russell 1000 indexes


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