Chicago, IL, September 23, 2010 - The CBOE Futures Exchange (CFE) today announced that when Weekly options on VIX futures (ticker symbol - VOW) are introduced for trading on Tuesday, September 28, Citadel Securities, LLC will be the Designated Primary Market Maker (DPM).
Weekly options on VIX futures will be the first option on a futures contract traded on CFE, coinciding with Citadel becoming a DPM for a CFE product for the first time.
"By combining the highly successful VIX futures contract with a version of weekly options expirations, this innovative product gives clients a new method of efficiently hedging volatility movement," said Donn Stobierski, managing director at Citadel Securities. "Citadel Securities has a tradition of working with the CBOE to support cutting-edge products in the marketplace. We act as a major liquidity provider on the exchange and are pleased to support this new offering with our first allocation as a DPM on CFE."
With this launch, all key pieces of the VIX product suite will now be available on CBOE's electronic technology platform, CBOEdirect -- cash-settled CBOE Volatility Index (VIX) options, VIX futures, options on volatility-related exchange traded notes, and on Tuesday, pending CFTC approval, Weekly options on VIX futures.
Weekly options on VIX futures - with American style expiration and physical settlement - will initially feature four consecutive contracts with weekly expirations on Fridays (unless Friday is a CFE holiday), allowing investors to select a contract with either one, two, three or four weeks to expiration. CFE will add a new contract when the near-term contract expires.
CFE, launched in 2004, currently offers futures on four contracts, including: the CBOE Volatility Index (VIX), CBOE mini-VIX (VM), CBOE S&P 500 3-Month Variance (VT) and CBOE S&P 500 12-Month Variance (VA). For the first eight months of 2010, CFE trading volume totaled more than 2.2 million contracts, compared with just under 500,000 contracts during the same period in 2009, a 348-percent year-over-year volume increase.
For more information on CFE's Weekly options on VIX futures, including full contract specifications, see http://cfe.cboe.com/Products/. For additional information on all CBOE volatility products, see www.cboe.com/VIX.
CFE, a wholly-owned subsidiary of CBOE Holdings, Inc. (NASDAQ: CBOE), offers an all-electronic, open-access market model, with traders providing liquidity and making markets. CFE trades are cleared by the AAA-rated Options Clearing Corporation (OCC). CBOE Futures Exchange is regulated by the Commodity Futures Trading Commission (CFTC).