The Spread: The Futures of Vol Trading

Matt Raebel

Matt Raebel


This week on The Spread, Cboe launches Mini VIX Futures while the CME announces a volatility product of its own, the OCC foots the bill, and more.

Produced by Mike Forrester.


Welcome to The Spread, I’m Matt Raebel. Lots of stuff happened late last week while we were filming the last episode, so it’s time to catch up on a few things. Cboe officially launched Mini VIX Futures, which are one-tenth the size of regular VIX futures, on August 10. According to a Cboe rep, they’ve traded over one hundred thousand contracts in the first week. Mini derivatives products have been getting more popular because they offer investors greater flexibility and precision when it comes to positioning during times of increased volatility; since Cboe decided to launch them in the middle of an election year with an ongoing pandemic and record options trading volumes, I’d say they picked a good time to give options traders more tools to play with. The CME seems to have the same idea; this week, it announced plans to launch the trading of futures on the Nasdaq-100 volatility index, also called the VOLQ. If approved by regulators, the contracts are planned to launch October 5. Miami International Holdings, the holding company of the MIAX Exchange Group, announced plans for a merger with MGEX this week. MIAX has been doing a lot of mergers and rolling out new products the past few years, so it’s a no-brainer that MGEX would find the deal attractive. Speaking of MIAX, according to the data MIAX published from July, last month the exchange group’s ADV was more than 3 million equity options contracts. For comparison, the CME’s ADV last month for equity options was 2 million, and Cboe’s was 8.9 million. All things considered, what with reports like this from MIAX, not to mention the OCC, the CME, and Cboe, it’s a good time to be an options trader, at least in the U.S. Eurex also disclosed its July volumes late last week. Despite the fact that derivatives trading volumes have been doing well in the U.S., over in Europe, Eurex saw a decrease in traded derivatives last month, especially equity derivatives. The release cited “ongoing uncertainty” as a reason for lower volumes, and who can blame ‘em? The way this year has gone, I’m uncertain as to whether I’m going to wake up tomorrow to find that everything’s normal, or that the sky has gone purple and I’ve somehow transformed into a giant cockroach! Hopefully we all get to resume some semblance of normalcy soon. In the meantime, the OCC is fronting some of its own money to help make things a little easier for market participants, according to a letter it sent August 3rd saying that it wants to increase its amount of “skin in the game.” By that, the OCC means it wants to increase the capital it contributes to cover for defaults from member organizations. The OCC is asking the SEC for a sixty two million dollar minimum, both to address the needs of its member organizations and to appeal for recognition from European regulators. SEC approval of the plan is still pending, but something tells me the OCC probably has the scratch lying around to cover a fund like that. That’s gonna do it for The Spread this week. Remember to check out John Lothian News dot com for more news, insight, and interviews – until next week, stay safe and happy trading.


Cboe Futures Exchange to List Mini VIX Futures Beginning August 10
PR Newswire (press release)

10 Key Features of the VIX Index and New Mini VIX Futures (VXM)
Matt Moran – Cboe blog

CME Group to Launch Futures on Nasdaq-100 Volatility Index (VOLQ)
CME Group (press release)

Miami International Holdings and MGEX Announce Plan of Merger; MGEX to Join MIAX Exchange Group
PR Newswire (press release)

Miami International Holdings Reports July 2020 Trading Results for MIAX  Exchange Group; July Market Share up Approximately 19% over 2019
MIAX Exchange Group

CME Group Reports July 2020 Monthly Market Statistics
CME Group

Cboe Global Markets Reports July 2020 Trading Volume

July monthly figures at Eurex and EEX

OCC boosts funding for “skin in the game”
Will Acworth –

John Lothian Newsletter

Today’s Newsletter

GameStop and Bitcoin Renewed a Push to Digitize the Stock Market

GameStop and Bitcoin Renewed a Push to Digitize the Stock Market

First Read $34,126/$300,000 (11.4%) ++++ Hits & Takes John Lothian & JLN Staff There is a new Van Gogh exhibit in New York billed as Van Gogh - The Immersive Experience. The site of this exhibit is the former trading floor of the NYMEX. The NYMEX trading floor...

We visit more than 100 websites daily for financial news (Would YOU do that?)

Past The Spread Episodes

The Spread: Tiger Billionaire

The Spread: Tiger Billionaire

This week on The Spread, the unregulated crypto exchange Deribit announces a bitcoin volatility index, the CME says over 1 million micro e-mini equity options contracts traded, and more.

The Spread: Moonshot

The Spread: Moonshot

This week on The Spread, bitcoin options hit records for bullishness, the OCC adds two industry veterans to its board of directors, and more.

The Spread: Boca On-Demand

The Spread: Boca On-Demand

This week on The Spread, FIA hosts a virtual version of Boca, Bill Brodsky and Steven Sears start an options-focused asset management firm, and more.

Pin It on Pinterest

Share This Story