Cboe Global Markets to launch options on Cboe Volatility Index

Cboe Global Markets announced plans to launch options on Cboe Volatility Index, or VIX, futures. The new options on VIX futures, or VX, are expected to begin trading on Cboe Futures Exchange, or CFE, on October 14, subject to regulatory review. Cboe currently offers securities-based VIX Index options, which allow investors to manage or gain exposure to broad U.S. equity market volatility. The new options on VIX futures will provide similar utility but are based on front-month VIX futures. With futures as the underlying asset, these options will be CFTC-regulated, enabling a wide array of market participants that are restricted from accessing U.S. securities-based options to use this product to express their views on equity market volatility. Options on VIX futures will be European-style, can only be exercised at expiration, and will physically settle into front-month VIX futures. The new options are expected to complement the existing VIX Index options, providing customers with more choice in expiration dates and enabling more granular hedging strategies. Users of options on VIX futures may be able to hedge those positions using front-month VIX futures and standard VIX Index options.