CBOE AND CFE TO EXPAND ETF-BASED VOLATILITY INDEX PRODUCTS
Brazil ETF Volatility Index Futures and Options Next New Listings
CBOE Press Release CHICAGO, February 17, 2012 — CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Chicago Board Options Exchange (CBOE) and CBOE Futures Exchange (CFE) will each launch a new ETF-based volatility index product in the coming weeks:
· CBOE Brazil ETF Volatility Index security futures (VXEW) – Tuesday, February 21 on CFE
· CBOE Brazil ETF Volatility Index options (VXEWZ) – Tuesday, March 6 on CBOE
The calculation of the CBOE Brazil ETF Volatility Index is derived from applying CBOE’s VIX® methodology to the prices of CBOE listed options on the iShares MSCI Brazil Index Fund (ETF symbol: EWZ). EWZ options were the seventeenth most actively traded ETF options in the U.S. last year.
http://jlne.ws/dqtww6 Warren Buffett’s Berkshire Hathaway Gets Weekly Options
Thursday, 16 Feb 2012
By: Lori Spechler, CNBC
Warren Buffett’s Berkshire Hathaway joins the growing list of companies that investors can play in the expanding market for short term options.
These short term, or “weekly” options, cover just as they say, one week’s worth of volatility. They have become highly popular as investors hunt for an easy, cheap way to play volatility spikes. Newly listed by the International Securities Exchange (ISE), the weekly options run on Berkshire Hathaway “B” shares [BRK.B 79.47 0.56 (+0.71%) ] start at $60 puts on the downside to $110 calls on the upside. Berkshire Hathaway class “B” shares currently trade at about $78 per share and have a 52-week trading range of $63.35 to $87.65
EXCHANGES A question and answer with the CBOE s Tilly and Brodsky
Chicago Board Options Exchange chairman and chief executive officer Bill Brodsky and president and chief operating officer Ed Tilly broke bread with the New York City press corps in January in order to update the scribes on the exchange operator’s initiatives. Traders Magazine presents a slice of the Q&A session.
Tilly: The insurance industry, for one. Consider a customized policy. You may open one today. It has S&P 500 exposure. The natural hedge to offset that exposure would be a contract that expires in 365 days from today. That’s the most pure vanilla. The other is long-term exposure to the S&P 500 for longer dated insurance. And that can be years-10 to15 years. For longer-dated options, on C2, we are able to list the SPXpm settlement, which is the convention. Electronically accessible contracts for a much longer duration for which we don’t necessarily need to rely on the traditional market maker on the floor of the CBOE.
http://jlne.ws/zMBn2q INSTITUTIONS Stifel Expands Into Options, Hires Three From Needham, Jefferies
Businessweek February 17, 2012
By Jeff Kearns and Laura Marcinek
Feb. 17 (Bloomberg) — Stifel Financial Corp. hired Brett Marcus and Sam Frankfort of Needham & Co. and Sam Skinner of Jefferies Group Inc. as managing directors for the firm’s first expansion into institutional equity options trading. Marcus, 36, Frankfort, 33, and Skinner, 33, are based in New York and started trading this week, according to Thomas Mulroy, the firm’s co-head of institutional equities and fixed income research and trading. They report to Mulroy.
“There’s plenty of potential for this business to grow dramatically over the next three to five years,” Mulroy said. “We’ve got a huge platform for research and trading and it made sense that if we could find the right individuals that we could add an options business.”
Options on FuturesOIL OPTIONS-Call buying is back in vogue
Reuters Thu Feb 16, 2012
* Geopolitical risk send traders back to April calls
* Puts see far less activity
* Dec 2012 $150 calls see open interest increase
NEW YORK Feb 16 (Reuters) – Call buying came back into vogue on Thursday, and all this week, as crude oil traders sought upside protection amid heightened geopolitical risks from Europe and the Middle East, traders said. The crude futures market traded higher on worries about potential supply disruptions out of Iran and the haggling over sovereign debt issues in Greece.
Options EducationMark Sebastian Emphasizes Importance Of Understanding Math Behind Options
(Kitco News) – The way Mark Sebastian sees it, pilots have to understand the concept of what makes an airplane lift off before they are allowed to fly. Likewise, traders should understand the mathematical concepts behind options before using them as a trading vehicle. Sebastian has built a career around options trading, spending roughly a decade on the floors of the Chicago Board Options Exchange and the American Stock Exchange. He is currently chief operating officer of Option Pit Mentoring and Consulting, a Chicago based-option education firm, and is also managing editor for Expiring Monthly: The Option Traders Journal, an all-digital, all-options magazine. Sebastian encourages prospective options traders to go beyond just learning the strategies. Options are contracts that give the buyer, or holder, the right—but not the obligation—to buy or sell a specific quantity of a commodity at a fixed price before a future date.