Wall Street Engineers Invent a New Head-Spinning Options Trade
- Cboe says it plans to launch options on VIX futures in October
- Product is latest bid to tap surging demand for derivatives
Traders work in the Cboe Volatility Index pit on the floor of the Cboe Global Markets building in Chicago, Illinois.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Financial wizards have conjured up possibly their most dizzying product yet in the quest to ride the derivatives boom: Cboe Global Markets Inc. is poised to offer options on futures for an index based on options on another index.
The Chicago-based firm plans to issue options tied to futures for the Cboe Volatility Index, the famous “fear gauge” otherwise known as the VIX. That gauge is itself built using options that track the S&P 500.