Core Insights - The U.S. government shutdown has introduced uncertainty into the markets, yet market volatility remains low, suggesting potential investment opportunities [1][3]. Volatility Index (VIX) Overview - The CBOE Volatility Index (VIX) serves as a measure of market expectations for 30-day volatility in the S&P 500 Index, with higher values indicating increased trader anxiety [2]. - Currently, the VIX is around 16, which is below its long-term median of 19-20, despite the presence of significant market uncertainties such as the government shutdown and tariff issues [3][5]. Historical Context - Earlier in 2025, the VIX spiked above 50 due to President Trump's tariff announcement, marking a significant increase in volatility [4]. - The VIX has recently fluctuated between 14 and 25, with current levels near 16 indicating a period of complacency in the market despite ongoing uncertainties [5]. Correlation Dynamics - Historically, the VIX has a strong negative correlation with major stock indexes, particularly the S&P 500, where sharp sell-offs in the index typically lead to spikes in the VIX [6]. - The inverse relationship between the VIX and stock market performance makes the VIX a useful tool for both speculative and defensive trading strategies [7].

Core Insights - Cboe Global Markets, Inc. (CBOE) is anticipated to show improvements in both revenue and earnings for the third quarter of 2025, with results expected to be reported on October 31 [1][2] Revenue Expectations - The Zacks Consensus Estimate for CBOE's third-quarter revenues is $579.03 million, reflecting an 8.8% increase from the previous year [1] - Market data revenues are estimated at $79.5 million, while access and capacity fees are projected to be $100.1 million [8] Earnings Projections - The consensus estimate for earnings is $2.46 per share, indicating a year-over-year increase of 10.8% [2] - The Earnings ESP for CBOE stands at +3.11%, with the Most Accurate Estimate at $2.53 per share [4] Factors Influencing Performance - Growth in index options, higher transaction and clearing fees, and increased market data and regulatory fees are expected to positively impact CBOE's performance [5][10] - Strong new subscriptions and unit sales in Cboe Data Vantage, along with pricing changes and brand investments, are likely to contribute to revenue growth [7] Market Dynamics - Increased trading volumes in Cboe options, U.S. equities, and European equities are anticipated to drive higher revenues in cash and spot markets [6] - The derivatives business is expected to benefit from rising transaction and clearing fees, alongside a growth in index options ADV [11][12] Additional Insights - Continued share buybacks are projected to support the bottom line for CBOE in the upcoming quarter [12]

Core Insights - The stock market is currently experiencing a fragile state, characterized by calm periods interrupted by sudden volatility spikes, as evidenced by the recent surge in the Cboe Volatility Index (VIX) to a six-month high on October 16, despite only a 0.6% drop in the S&P 500 [6][3] - The volatility spike on October 16 was attributed to market reactions to concerns about loan losses at regional banks and was noted to be more extreme than previous significant volatility events [6][3] - By October 17, the VIX returned to previous levels, indicating a quick reversal in market sentiment following the initial spike [6][1] Market Dynamics - UBS strategists observed that S&P 500 option market makers became shorter volatility as the market fell, which may have exacerbated the VIX increase as those positions were covered [1][6] - Dealers were likely short VIX calls, and the hedging of these positions contributed to the volatility spike [1][6] - Bank of America strategists suggested that the VIX jump was more technically driven, with VIX exchange-traded products (ETPs) not significantly contributing to the spike as investors took profits [2][6] Volatility and ETP Growth - The pattern of calm followed by volatility spikes highlights a push-pull dynamic in the market, which has been exacerbated by the substantial growth of ETPs [3][6] - A 10-point increase in front-month VIX futures would require only about 17% of long holders of volatility securities to sell in order to offset dealer rebalancing, indicating a relatively low threshold for market impact [2][6]

Core Viewpoint - Defiance ETFs has launched the Defiance Enhanced Long Vol ETF (VIXI), which aims to provide enhanced total returns by combining long exposure to VIX futures with leveraged short exposure to the S&P 500 Index, targeting periods of high volatility and declining equity markets [1][2]. Group 1: Fund Strategy - VIXI offers active investors a method to gain targeted exposure to market volatility while hedging against downturns in U.S. equities by pairing long VIX futures with a leveraged short position on the S&P 500 [2]. - The fund's long position in VIX futures is designed to capitalize on spikes in volatility, while its leveraged short exposure to the S&P 500 aims to enhance downside protection during equity sell-offs, leveraging the historically inverse relationship between equity markets and volatility [3]. Group 2: Company Background - Defiance, founded in 2018, is recognized for its innovation in the ETF space, specializing in thematic, leveraged, and volatility-based ETFs, including first-mover leveraged single-stock ETFs that allow investors to pursue amplified positions in high-growth companies [6].

Core Insights - Cboe Global Markets, Inc. (CBOE) is anticipated to show improvements in both revenue and earnings for Q2 2025, with revenue expected at $572.24 million, reflecting an 11.3% year-over-year growth [2] - The earnings consensus estimate is $2.42 per share, indicating a 12.5% increase from the previous year, with a slight upward revision of 0.8% in the last 30 days [3] Revenue and Earnings Estimates - The Zacks Consensus Estimate for CBOE's second-quarter revenues is $572.24 million, which is an 11.3% increase from the prior year [2] - The earnings estimate for the quarter is $2.42 per share, representing a year-over-year increase of 12.5% [3] Earnings Prediction Model - The earnings prediction model indicates a likely earnings beat for Cboe Global, supported by a positive Earnings ESP of +0.66% and a Zacks Rank of 3 (Hold) [4][5] Factors Influencing Q2 Results - Growth in index options, higher transaction and clearing fees, and increased access and capacity fees are expected to positively impact CBOE's Q2 performance [6] - Increased revenues from cash and spot markets, as well as derivatives markets, are anticipated due to higher transaction volumes on Cboe exchanges [7] Fee Structure and Revenue Breakdown - The company expects higher revenues from proprietary market data fees, with estimates of $81.1 million for market data revenues and $96.6 million for access and capacity fees [9] - Increased transaction and clearing fees are projected to benefit both cash and spot markets as well as the derivatives business [8] Product Performance - Cboe Global is expected to benefit from strong performance in proprietary products, including VIX futures and SPX options, along with growth in multi-listed options trading [12] - Continued share buybacks are anticipated to support the bottom line for the quarter [12]