CBOE Eyes New Futures On Equities, Bond Yields, Commodities
January 10 2012 - 6:50PM
Dow Jones News
The parent of the Chicago Board Options Exchange is exploring
ways to broaden its small U.S. futures market with contracts linked
to stocks, bond yields and commodities, according to an
executive.
CBOE Holdings Inc. (CBOE), which runs the largest U.S. options
exchange by contract volume, is looking for ways to bulk up in
proprietary futures contracts that carry higher trading fees than
stock options.
The eight-year-old CBOE Futures Exchange does most of its
business in futures linked to the CBOE Volatility Index, or VIX,
the so-called "fear gauge" that reflects anticipated gyrations in
the Standard & Poor's 500 stock index.
Any new contracts tied to stocks, interest rates and commodities
launched on the CBOE Futures Exchange are unlikely to be copycat
versions of products already offered by larger futures market
operators like CME Group Inc. (CME) and IntercontinentalExchange
Inc. (ICE), said James Lubin, managing director of the platform for
CBOE.
"It's hard to displace an established franchise," said Lubin,
speaking at a CBOE event Tuesday. The potential new contracts are
under discussion, he said, but no decisions have been made on which
ones to pursue.
About 48,000 VIX futures traded on CBOE's futures market on an
average day in 2011, according to CBOE figures, 174% higher than
the 2010 average. Business has been boosted by growth in
exchange-traded products linked to the VIX, which buy and sell the
futures to manage exposure. About $2.8 billion in assets are now
managed by such vehicles, according to CBOE.
The Chicago-based firm late last year sought to expand beyond
volatility contracts with plans to introduce futures contracts
linked to indexes tracking real estate prices, and this week listed
futures tied to volatility in emerging-market stocks.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
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