In July, we acquired pan-European clearinghouse EuroCCP, announced plans for Mini VIX futures, shared market insights and more. Follow us on Twitter for daily updates as we continue defining markets and check back here at the end of August for our next monthly update.
Cboe Acquires EuroCCP
Cboe started July strong, completing its acquisition of EuroCCP on July 1, and announcing plans to launch Cboe Europe Derivatives in 2021. The acquisition brings together two companies that have long championed competition, open access and clearing interoperability in Europe. EuroCCP currently clears trades for 37 trading venues, which represent close to 95 percent of all equity trades executed on organized markets in Europe. Cboe sees an opportunity to further grow this business by capitalizing on the strength of its pan-European network, and by pursuing the development of derivatives trading and clearing capabilities in the region.
Next, Cboe plans to launch Cboe Europe Derivatives, a new Amsterdam-based futures and options market, which will initially offer trading in equity futures and options based on six Cboe Europe Indices. Cboe will plan to add futures and options on other European indices down the road.
Cboe Reports June 2020 Trading Volume
Cboe reported its June 2020 trading volume on July 6, which included several highlights. Options average daily volume (ADV) was up 50 percent, U.S. equities ADV was up 83 percent and Global FX ADNV was up 5 percent year-over-year. Cboe’s four options exchanges set a new single day volume record, reaching more than 16 million contracts traded. Additionally, Cboe EDGA™ Options Exchange had a monthly ADV of more than one million contracts, a new all-time high, and Cboe EDGX™ Equities Exchange saw more than 431 million shares traded per day, a new monthly ADV record.
Manage Your U.S. Equities Risk on Your Own Terms
Cboe recently released new enhancements to its U.S. equities risk management offering that can help investors continue trading U.S. equities with greater peace of mind. Cboe’s robust equities risk management tools are designed to help firms manage execution risk with ease. The new functionality offers three interrelated, complementary enhancements that together provide powerful and flexible risk management solutions at varying levels of granularity.
Cboe Futures Exchange to List Mini VIX Futures
On July 13, Cboe announced plans to launch trading in Mini Cboe Volatility Index™ (VIX™) futures on Cboe Futures Exchange℠ (CFE™) beginning Monday, August 10, subject to regulatory review. The new smaller-sized contract builds on the success of VIX futures — the most actively traded, exchange-listed volatility futures contract in the world — and aims to meet investor demand for a wider variety of tools to gain direct exposure to the VIX Index, recognized as the world’s premier gauge of U.S. equity market volatility.
New Mini VIX futures (ticker symbol: VXM) will be structured like the standard VIX futures contract, but will feature a $100 multiplier, making them one-tenth the size of the standard contract. The smaller notional value of the mini contract is designed to provide additional flexibility in volatility risk management and greater precision when allocating among smaller, managed accounts.
Lighting up the Dark: Hidden Trends in Off-Exchange Trading
The fragmentation of equity markets has caused market centers to evolve in recent years, each with their own distinct characteristics. With 13 live public exchanges (soon to be 16), over 30 Alternative Trading Systems (ATS) — electronic trading venues that match buyers and sellers without displaying a public quote — and multiple other ‘off-exchange’ market centers, equity market participants have a slew of options for optimal execution. The variety of choice makes the decision even more complex, and as a result competition continues to grow between exchanges and off-exchange market centers.
Asad Bhatti, Senior Director, U.S. Equities, recently analyzed the growth of off-exchange trading and identified a few key trends that are worth noting.
Cboe Global Markets Plans to Bring Periodic Auctions to U.S. Equity Markets
Cboe plans to introduce periodic auctions for the trading of U.S. equities, subject to regulatory approval. The innovative mechanism is based on a model first launched by Cboe in Europe, and will be the first auction mechanism of its kind in the U.S. Driven by customer demand, Cboe aims to bring the U.S. equity markets a new, intraday auction mechanism that delivers beneficial execution outcomes for all market participants.
Cboe Reports Results for Second Quarter 2020
On July 31, Cboe reported solid financial results for the second quarter, highlighting Cboe’s diversified business across multiple asset classes. Cboe achieved record trading volumes in U.S. cash equities and multi-listed options, fueled by growth in retail trading activity. Amid an ongoing work from home environment, Cboe continued to execute on strategic initiatives, including a focus on expanding its global access and distribution and engaging customers via information solutions.