Cboe Global Markets, Inc, announced this week that it plans to launch trading in Mini Cboe Volatility Index (VIX) futures on Cboe Futures Exchange (CFE) starting on Monday, the 10th of August.
The new product, which is subject to regulatory review, builds on Cboe’s launch of VIX futures, which is the most actively traded, exchange-listed volatility futures contract in the world, according to the exchange holding company.
The Mini futures have been created to meet investor demand for a wider variety of tools to gain direct exposure to the VIX Index, Cboe said in its statement on Monday.
The new product will be structured similar to the standard VIX futures contract. However, it will feature a $100 multiplier, making them one-tenth the size of the standard contract.
Cboe: VIX mini futures to provide additional opportunities
Commenting on the new product Ed Tilly, Chairman, President and Chief Executive Officer of Cboe Global Markets, said in the statement: “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. The futures allow market participants the opportunity to trade their view of the future direction of the expected volatility of the S&P 500 Index.
Cboe has also launched the mini contract to provide increased flexibility in volatility risk management, the company said in the statement. The exchange operator expects the new product will appeal to a broad audience – Commodity Trading Advisors (CTAs), Futures Commission Merchants (FCMs), proprietary trading firms, institutional investors and sophisticated retail investors.