JLN Options: CBOE Holdings And S&P Dow Jones Indices Extend Licensing Agreement Through 2033

Mar 13, 2013

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CBOE Holdings And S&P Dow Jones Indices Extend Licensing Agreement Through 2033
CBOE Holdings, Inc. and S&P Dow Jones Indices announced today that they have finalized an amendment to their license agreement that extends Chicago Board Options Exchange’s (CBOE) exclusive rights to list security options contracts based on certain indices calculated and published by S&P Dow Jones Indices through 2032, and non-exclusive rights through 2033.

***JK: Related tidbits:
– 2013 is the 30th Year since CBOE first introduced the OEX, or S&P 100 and the S&P 500 options.
– The S&P 500 options contract was the most traded index option w almost 700,000 contacts traded daily.
– S&P-based index options accounted for 16% of CBOE total options volume in 2012.
– Terms of the deal are not public but CBOE said that if the new fee structure was applied to 2012 volume, the royalty fees for 2012 would have been 10% higher.

Mini Options to Have Super Mini Prices, As In Free  
Kaitlyn Kiernan, The Wall Street Journal
The pending introduction of “mini” options–geared toward investors who want rights to buy or sell fewer than 100 shares of high-priced stocks–has got options exchanges taking a price war to the extreme. At some venues, trading in names like Apple (AAPL) and Amazon.com (AMZN) mini options will be free. Nasdaq OMX Group Inc.’s (NDAQ) Philadelphia trading venue PHLX and BATS Global Markets Inc. announced separately Tuesday that they won’t charge for trading in the new mini options contracts.

A Distressed Debt ETF in the Works
Tom Lydon, ETF Trends
With investors regaining their appetite for risk, Van Eck Global, the sponsor behind the Market Vectors exchange traded funds, is collaborating with a NYU professor to launch a potentially high risk/high reward fund product that focuses on distressed debt.

Lowest VIX Close Since Day Before Biggest VIX Spike Ever: iPath S&P 500 VIX Short Term Futures TM ETN (VXX)
Bill Luby, ETF Daily News
So…at the risk of being splashed all over the Zero Hedge comments stream I thought it worth noting that today the VIX closed at 11.56. While this marks the lowest close in the VIX in over six years, a surprising portion of this low VIX is the result of a calculation quirk I described earlier today in The VIX, Interpolation and the Roll.

Low-Volatility ETFs Still Hot Despite Collapsing VIX
Tom Lydon, ETF Trends
Investors are still battle-scarred from suffering through two brutal market pullbacks since 2000. They can’t seem to shake off the dot-com bust and subprime meltdown despite SDPR Dow Jones Industrial Average ETF (NYSEArca: DIA) breaking out to record highs.

JPMorgan faces daunting day over derivatives
Zachary Warmbrodt and MJ Lee, Politico
JPMorgan Chase and its CEO, Jamie Dimon, have worked tirelessly to put the billions of dollars in “London Whale” trading losses behind the Wall Street firm as it works to restore its once sterling reputation.
But this week, there is a land mine on its road to redemption.

Interactive Brokers Rated the #1 Online Broker by Barron’s for the Second Year in a Row
Press Release (Financial Post)
 In addition to taking the number one spot overall this year IB received top marks in a number of sub-categories, named “Best for Frequent Traders”, “Best for International Traders” and “Best for Options Traders” by Barron’s.

Options continues expansion with new FX trading destinations
Options, provider of the Options PIPE Private Financial Cloud, a managed infrastructure platform for the trading and alternative investment communities, has expanded connectivity to additional global foreign exchange markets and has upgraded connectivity between the major US trading venues.


As Dodd-Frank Day Dawns, Market Trends Emerge
CME Group
“Dodd-Frank Day” on March 11, when most active users of swaps in the U.S. had to comply with the central clearing mandate as part of over-the-counter derivatives reform, has come and gone, but the impact of this occasion has been evident for some time now, according to TABB Group, LLC.

Bloomberg LP Weighs CFTC Lawsuit Over Swap Collateral Rules
Silla Brush, Bloomberg
Bloomberg LP threatened to sue the top U.S. derivatives regulator unless it halts regulations setting higher collateral standards for swaps than comparable futures.

Challenges Facing Next S.E.C. Chief
William Alden, Dealbook
Mary Jo White got a friendly reception during testimony before the Senate Banking Committee on Tuesday, moving closer to becoming the next leader of the Securities and Exchange Commission. But even her supporters on Capitol Hill highlighted the significant challenges that would await her in that role, DealBook’s Ben Protess writes.

Gensler Rebuffs Regulatory Reach Critics in FIA Keynote
James Rundle, WatersTechnology
US Commodity Futures Trading Commission (CFTC) chairman Gary Gensler has defended elements of the Dodd-Frank Act over perceived extra-territoriality, in his keynote address to the Futures Industry Association’s (FIA) annual conference in Boca Raton, Florida.


Trading Technologies to Provide Connectivity to GovEx
Press Release (Trading Technologies)
Trading Technologies International, Inc. (TT) today announced that TT will introduce connectivity to GovEx, a trading platform for U.S. Treasury securities, in the first half of 2013. Providing a centrally cleared, high-performance platform, GovEx offers anonymity and diverse liquidity for those seeking access to U.S. Treasury securities, including highly-liquid on-the-run, when-issued and first-available off-the-run U.S. Treasury bills, notes and bonds. TT is a global provider of award-winning, high-performance derivatives trading software.


What The Options Market Is Telling Us About The Euro, Yen And Sterling 
Marc Chandler, Seeking Alpha
The options markets may generate insight into the direction of the spot foreign exchange market and what traders may be fearful of. For our purposes here we will look at two measures for the euro, yen and sterling.

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