CBOE Futures Exchange is to launch trading in security futures on the CBOE Emerging Markets ETF Volatility Index, pending regulatory approval.
The VXEEM Index reflects the implied volatility of the iShares MSCI Emerging Markets Index exchange-traded fund (ETF) (ticker:EEM). EEM options were the eleventh most actively traded option at CBOE in 2011.
In addition to hedging emerging markets volatility exposure or making direct plays on emerging markets volatility, VXEM security futures – in conjunction with other volatility products – will allow market participants to trade cross-index or cross-asset volatility.
Barclays Capital will be a Lead Market Maker for VXEM security futures.
"We are delighted that Barclays Capital has taken on a market-making role," says CFE Managing Director Jim Lubin. "Their expertise in volatility trading should help us create a deep and liquid market in VXEM futures. Further, we look forward to working with them to build out our suite of volatility offerings."
The VXEM security futures contract is the first of several sector-specific ETF and single-stock CBOE Volatility Index products that CFE plans to launch in 2012.
