Cboe Global Markets, a derivatives and securities exchange network, has partnered with MSCI to expand its suite of Cboe-MSCI index options and volatility indices.
Cboe will introduce three new products based on MSCI global indices: Cboe MSCI World Index Options (MXWLD), Cboe MSCI ACWI Index Options (MXACW), and Cboe MSCI USA Index Options (MXUSA). These options are set to begin trading on 18 March 2024, pending regulatory approval.
Cboe is also launching two new Cboe MSCI Volatility Indices: the Cboe MSCI EAFE Volatility Index (VXMXEA) and the Cboe MSCI Emerging Markets Volatility Index (VXMXEF). Developed using Cboe’s proprietary VIX Index methodology, these indices are based on existing MSCI EAFE Index Options (MXEA) and MSCI Emerging Markets Index Options (MXEF) and are designed to provide a transparent measure of the market’s expectation of 30-day implied volatility by these respective MSCI index option classes.
The new Cboe MSCI Volatility Indices aim to provide comparable measures for international and emerging equity market volatility.
Catherine Clay, global head of derivatives at Cboe, said: “In today’s rapidly evolving landscape, investors require sophisticated tools to navigate the markets with confidence. Our ongoing collaboration with MSCI reflects our shared commitment to fostering innovation and providing solutions that empower investors to better manage risk and seize potential opportunities in the global marketplace.”
“We are excited to expand our Cboe-MSCI toolkit with additional index options and volatility indices – an enhancement that will not only broaden our customers’ product choice, but also enrich the ways they interact with and analyse the global markets. Crucially, the three new index options, which cover developed and emerging markets, are expected to also give investors comprehensive access to gain a variety of different exposures around the globe,” Clay added.
The new options will be based on the MSCI World Index, the MSCI ACWI Index and the MSCI USA Index. Both MXWLD and MXUSA options will be based on a fraction (1/100th) of the value of their underlying index, which may make them more accessible to a broader base of customers, Cboe said.
George Harrington, global head of derivatives licensing at MSCI, said: “The launch of the Cboe MSCI EAFE Volatility Index (VXMXEA) and Cboe MSCI Emerging Markets Volatility Index (VXMXEF) provides the investment community with benchmarks for option investing, and Cboe’s launch of options linked to the MSCI World Index, MSCI ACWI Index and MSCI USA Index further develops the ecosystem of tradable products.”
MXACW, MXUSA, and MXWLD will have standard options that expire on the third Friday of each month. In response to customer feedback, Cboe plans to also list five end-of-week expirations, which are expected to begin trading on 21 March 2024, pending regulatory approval.
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