CHICAGO, Sept. 2, 2011 /PRNewswire/ -- CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that the Securities and Exchange Commission (SEC) has approved its rule filing to launch, on a pilot basis, SPXpm, its proposed new S&P 500 Index option product. SPXpm will be traded on the C2 Options Exchange (C2), the Company's all-electronic exchange.
C2's SPXpm product will be a cash-settled index option based on the S&P 500 Index, the premier benchmark of the broader U.S. market. SPXpm is almost identical in structure to the Chicago Board Options Exchange's (CBOE) flagship S&P 500 SPX contract, the most-actively traded U.S. index option product, except, as the SPXpm name implies, it has a "p.m." settlement.
"We are pleased to provide investors with a new, efficient way to trade options on the S&P 500," said William J. Brodsky, CBOE Holdings Chairman and Chief Executive Officer. "SPXpm will offer users 'point-and-click' convenience, and the large contract size -- with one SPXpm contract being ten times larger than one SPY option contract -- will make SPXpm extremely cost-effective to trade."
Brodsky continued, "The launch of SPXpm will enable us to broaden our customer reach by providing two very deep pools of liquidity to trade the S&P 500 Index -- one trading SPXpm electronically on C2, and the other trading SPX AM with the ability to negotiate large, complex orders afforded by floor trading at CBOE."
Details regarding a launch date will be announced in the near future.
A complete overview of SPXpm can be found at: http://www.cboe.com/SPXpm.
One final noteworthy item, the launch of SPXpm options on C2 will not impact, nor will it have any effect on, how CBOE calculates the CBOE Volatility Index (VIX). VIX is calculated by using real-time SPX option bid/ask quotes. VIX uses near-term and next-term at- and out-of-the money SPX options with at least eight days left to expiration and then weighs them to yield a constant, 30-day measure of the expected volatility of the S&P 500 Index. The current methodology being used to derive the value of VIX will remain exactly the same.