CBOE CEO Edward Tilly on New Initiatives, Expanding Customer Reach in Asia

CBOE CEO Edward Tilly began day two of CBOE RMC Asia in Hong Kong with a tribute of sorts to the growth and expansion of CBOE’s Risk Management Conferences. Years of success in the U.S. and Europe have paved the road to CBOE’s inaugural event in Asia this year.

Turning to product news, Tilly highlighted the recent launches of VIX Weeklys futures in July and VIX Weeklys options in October. “We worked closely with our VIX user base to develop a short-term volatility product that more closely tracks the VIX Index and fills the gaps between monthly VIX expirations,” he said.

“Expanding access to VIX trading for our customers here in Asia and beyond is a top priority for CBOE,” said Tilly.  To this end, CBOE launched an additional six-hour trading session in VIX options and S&P 500 Index (SPX) options this year.  “SPX options – which enable investors to efficiently take a position on the U.S. market – have tremendous appeal here in Asia, and indeed, throughout the world,” Tilly commented.  The VIX and SPX options session begins at 2:00 a.m. Chicago time, which aligns with the market open in London and the close in Asia. The launch of an extended trading session for SPX and VIX options follows the rollout of near 24-hour trading in VIX futures last year.

Tilly also highlighted the 10 new options-based strategy performance benchmark indexes using SPX Weeklys launched in August and a new “Japan VIX”.  CBOE partner S&P Dow Jones Indices worked with the Japan Exchange Group (JPX) to introduce the S&P/JPX JGB VIX Index, which employs CBOE’s VIX methodology to calculate the volatility of Japanese government bonds based on futures listed on the Osaka Exchange.  This index is the “second of its kind in the global fixed-income space” after the CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (TYVIX Index) he noted.

Tilly talked of CBOE’s collaboration with the London Stock Exchange Group (LSEG).  CBOE, LSEG and major dealer banks are preparing to launch CurveGlobal, an innovative interest rate trading venue, in the second quarter of 2016.

CBOE, through an agreement with LSEG-owned FTSE Russell Indexes, acts as the exclusive U.S. provider for cash-settled options on numerous FTSE Russell indexes, including the Russell 2000, Russell 1000, 1000 Value, and 1000 Growth indexes.

Tilly referenced last week’s announcement of the launch of five new options-based strategy performance benchmark indexes tied to the Russell 2000 Index, including a CBOE Russell 2000 PutWrite Index.  He also announced the planned December 22 launch of the FTSE 100 and FTSE China 50 Indexes.

He also highlighted new product collaborations with Eurekahedge, a Singapore-based hedge fund research company, and global index provider MSCI.  CBOE and Eurekahedge have created four new benchmarks that measure the performance of hedge funds that employ distinct volatility-based investment strategies; and CBOE recently launched options on the MSCI EAFE and MSCI Emerging Markets indexes.

Representatives from Tradelegs are also at RMC to demo their newly updated Derivatives Strategist software, which generates optimized trade ideas based upon an investor’s equity risk and return predictions, the investor’s capital constraints, and market data supplied by Tradelegs.  Tilly added, “The timing for a demo could not be better as the updated software includes support of index options, beginning with SPX, and a portfolio hedger feature we think you will find of interest.”

Turning to educational initiatives, Tilly said, “I would like to reiterate how thrilled we are for the opportunity to meet with you in Asia, where we continue to see great demand for our products.  RMC Asia represents one of two new significant customer initiatives in the region,” with the other being the CBOE Options Institute at the Singapore Exchange (SGX).  Tilly said that CBOE was pleased that the first global extension of the Options Institute will be in Asia.

He continued, “CBOE has long been committed to expanding the options and volatility marketplace through investor education.  Much of our educational mission is conducted through the world-renowned CBOE Options Institute, which has seen growing demand from Asian market participants.  The CBOE Options Institute at SGX will leverage CBOE’s options expertise with SGX’s position in the region to respond to the tremendous interest we see for options and volatility trading in Asia.”

In closing, Tilly remarked, “Working closely with customers like you, in forums like this one, helps us create products and services that add value to your trading experience and expertise.”

The first annual CBOE RMC Asia is in full swing – follow coverage on Twitter with the hashtag #CBOERMC and check out www.cboermc.com  throughout the conference for all of the latest news and highlights, including session blogs.