CBOE Emerging Market Volatility Feature for Options Profits

January 26, 2012

The Chicago Board of Trade on Jan. 31 will launch options trading on its recently introduced CBOE Emerging Markets ETF Volatility Index (VXEEM), according to The Street.

VXEEM utilizes the same processes of determining market volatility as the CBOE Volatility Index, known as the VIX, or “fear index.” However, VXEEM will use options on the iShares MSCI Emerging Market Index Fund (NYSEArca: EEM) instead of options on the S&P 500 Index, according to The Street.

Once VIX options were listed, volume in the VIX futures began to pick up and, if this is any indication, VXEEM options may cause an increase in VXEEM futures trading, according to the report.

For the full breakdown, go to TheStreet.com.

 

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