The Spread: Mini Derivatives Arms Race


This week on The Spread, FTSE Russell and SGX form a strategic alliance, Cboe’s mini VIX futures sell like hotcakes, and more.

Produced by Mike Forrester.



Welcome to The Spread, I’m Matt Raebel. Couple quick tidbits to touch on first – this week, FTSE Russell formed a strategic partnership with SGX; the deal was primarily about building multi-asset index futures and options, ESG derivatives, and ETF offerings for Asian and emerging markets. MIAX also had big news this week: the exchange group announced that it has been approved to run an equities exchange by the SEC. The launch date for that is scheduled for next month, September 25. Good on ‘em. Cboe launched mini VIX futures last week, and by the time we recorded last week’s episode, they had traded over one hundred thousand contracts. This week, they announced that the mini futures traded a grand total of nearly one hundred twenty-seven thousand contracts for that week. Maybe next week they’ll pull an OCC and beat their own high score. You know, lately, it seems to me like Cboe and the CME have been engaged in something of a mini derivatives arms race – one week Cboe announces a new product, the next week the CME announces a product that directly competes with it, or vice-versa. Other times, one of them announces something the day after the other announces something – ahh, it’s a whole thing. Chock it up to the old rivalry I guess. It just makes me wonder if Cboe is going to launch options on mini VIX futures at some point, like the CME’s Options on its micro E-minis. I reached out to Cboe about it, but they haven’t gotten back to me yet, so who knows? Maybe they’re working on something else, like mini bitcoin futures! Heh, I’m sure they’re gonna hate that joke. Just kidding Cboe, we’re having fun here. In the world of retail trading, E*Trade put out a new study. This study showed that trading activity among my people – millennials and Gen Zers or retail traders under 34, according to the wording of the study – has increased since the COVID crisis escalated. 46 percent of younger respondents also said they’ve been trading derivatives more frequently. I guess if you’re stuck at home because of quarantine or layoffs, you gotta make ends meet somehow. Also I know people talk about retail traders adversely affecting market quality, but the stock market has also been hitting record highs this year; just sayin’. Check out John Lothian News dot com for more videos, podcasts, articles, and miscellaneous news – for example, our friend Jitesh Thakkar late last week had all charges against him by the CFTC dropped! Thus ends the notorious spoofing case against him that we have been covering for…about as long as I’ve worked here. JLN’s Thom Thompson wrote an article about it, which you can read on our site. That’s gonna do it for The Spread, thanks for watching – stay safe and happy trading.



FTSE Russell Forms Strategic Partnership With SGX
Markets Media

MIAX PEARL Receives Approval to Operate Equities Exchange; Launch Date Confirmed for September 25, 2020
PR Newswire (press release)

Cboe Global Markets Sees Strong Debut for New Mini VIX Futures
PR Newswire (press release)

Gen Z and Millennials Really Are Trading More In the Covid Era
Sarah Ponczek – Bloomberg

Wall Street stocks stall at record high
Sarah Provan and Hudson Lockett – Financial Times

CFTC Dismisses Its Case Against Jitesh Thakkar, Settles With Edge Financial
Thom Thompson – JLN




A young woman wearing a hijab on a pink background.

Asma Awass

I am a Finance and Business Analytics student at UIC. I am an active member of my university’s boxing club and I also enjoy the creative arts.

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