Cboe to Launch New Cboe S&P 500 Variance Futures on Monday, September 23

Core Viewpoint - Cboe Global Markets is launching the Cboe S&P 500 Variance Futures on September 23, 2024, to provide market participants with tools to manage volatility risks and capitalize on U.S. equity market fluctuations during uncertain macroeconomic conditions [1][2][3]. Group 1: Product Overview - The Cboe S&P 500 Variance Futures are designed to help market participants calculate implied volatility of the S&P 500 Index and manage volatility risks [2][3]. - These futures will offer a streamlined approach to trading the spread between implied and realized volatility, allowing participants to exploit discrepancies between market expectations and actual outcomes [2][3]. - The contracts will settle based on the annualized realized variance of the S&P 500 Index, calculated daily from the closing index value [4][5]. Group 2: Market Context and Demand - The launch is timely, coinciding with heightened risk management needs due to the upcoming U.S. election, changing monetary policy, and ongoing geopolitical tensions [3][4]. - There is a growing demand for hedging and income generation strategies, prompting Cboe to simplify complex trading strategies and broaden access to derivatives markets [3][4]. Group 3: Target Audience - The new product is expected to attract a diverse range of market participants, including volatility traders, hedge funds, institutional investors, and portfolio managers seeking capital efficiency and enhanced diversification [3][4]. - Market participants transitioning from OTC variance swaps to standardized products will find the Cboe S&P 500 Variance Futures particularly appealing [3][4]. Group 4: Future Developments - Cboe plans to introduce options on VIX Futures starting October 14, 2024, further expanding its SPX and VIX product suite to meet customer demand [6].