CBOE Volume Up Slightly From Feb. 2011
According to a press release, CBOE Holdings recorded an average daily volume in options of 5.1 million contracts in February, a 1 percent increase from the prior year.
While the average daily volume for equity options was down 8 percent, index options ADV was up 12 percent and ETF options ADV up 5 percent. The most actively traded of those contracts were the options on the S&P 500 Index, the SPDR S&P 500 Index Fund (NYSE Arca: SPY), the CBOE Volatility Index (VIX), the PowerShares QQQ Trust (Nasdaq GM: QQQ) and the iShares Russell 2000 Index Fund (NYSE Arca: IWM), the press release said.
S&P, CBOE Sue ISE Over ‘SPY’ Options
Standard & Poor’s parent McGraw Hill and the CBOE asked a court in Chicago to enforce a pre-existing injunction against the International Securities Exchange to prohibit the ISE from listing and trading options on the ISE Max SPY Index, arguing the ISE products are essentially S&P index options.
The two companies said they obtained an injunction against the ISE in July 2010 that prohibited ISE’s listing or providing an exchange market for the trading of S&P 500 index options.
CBOE Chairman and Chief Executive Officer William Brodsky said in the press release that the two companies had filed for the injunction to protect “CBOE’s license rights in S&P 500 index options and S&P’s proprietary rights in the S&P 500.”
He further noted that there was a legal precedent set in 2010 with an injunction that specifically blocked the ISE from offering options on the S&P 500.
A VIX On The VIX?
In mid-March, the CBOE rolled out its “VIX of VIX” index, or VVIX, a press release said. The index essentially measures the volatility of the CBOE Volatility Index, the statement noted.
The VVIX uses the same basic methodology as the VIX to arrive at the expected volatility of a theoretical VIX futures contract expiring in 30 days. It bases its calculations on the prices of at- and out-of-the-money VIX options, the CBOE website noted, similar to how the VIX itself relies on the prices of S&P 500 options.
The CBOE suggested in the press release that investors would be able to develop investment strategies using the VVIX and VIX in conjunction with each other.