CBOE Considering Apple Volatility Product
On Wednesday, Edward Tilly, CBOE Holdings Inc. president and chief operating officer, said the exchange may soon have trading in security futures derived from volatility in Apple Inc and other individual stocks. This would be similar to CBOE's exchange-traded fund (ETF) volatility benchmarks.
Tilly's remarks came at the UBS Global Financial Services Conference in New York.
He explained that customers frequently ask the exchange to create tradable products based on some of CBOE's two dozen-plus VIX benchmarks. In 2012, the exchange has already introduced security futures and options on three benchmarks that encompasses highly active sector-specific ETF volatility. This includes the CBOE Emerging Markets ETF Volatility Index, the CBOE Brazil ETF Volatility Index, and the CBOE Crude Oil ETF Volatility Index.
Tilly said in a Reuters article, "We have benchmarks on a number of other products I would point out one that is a favorite of mine that I wouldn't be surprised if I saw us launch in the near future - futures on Apple VIX."
The timeline for CBOE to broaden its VIX product line will take place in upcoming months.
In 2011, CBOE introduced indexes that apply the CBOE Volatility Index methodology to options on five active individual stocks including Apple, Amazon Inc., IBM, Google Inc, and Goldman Sachs Group Inc. These measure the expected volatility of the each individual equity.
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