Tag Archives: CBOE

VIX® Dropped Below S&P 500® Realized Volatility

While everyone has been concerned about the inverted yield curve, the CBOE Volatility Index® (VIX) has been under the 21-trading-day realized volatility of the S&P 500 since Aug. 16, 2019. Since volatility traders care not only about what is expected but also what actually transpired, the spread between implied volatility and realized volatility is one Read more […]

Cboe S&P 500 Buffer Protect Indexes: First Outcome Period Recap

On June 28, 2019 the July Series of the Cboe S&P 500 Buffer Protect Indexes completed their first one-year outcome period (6/28/18 – 6/28/19). The Cboe S&P 500 Buffer Protect Indexes are designed to afford investors defined exposures to the S&P 500 Price Index, where the downside buffer levels, upside growth potential, and outcome period Read more […]

S&P 500 Cboe Target Outcome Indexes – Investor Applications

Many investments today target speculative returns, with uncertain levels of risk, over an uncertain period of time. While opportunistic, this approach to investing often brings a high degree of uncertainty. Outcome based investing encourages targeting a specific defined payoff profile, with an allowance for a specific defined level of risk, at a specific point in Read more […]

Access the S&P 500 with Built-in Buffers

Earlier in 2018 S&P Dow Jones Indices, Cboe Global Marketssm, and Milliman Financial Risk Management LLC collaborated to build four new series of Target Outcome Indexes, designed to reflect defined exposures to the S&P 500 Index, where the downside protection levels, upside growth potential, enhancement level, and outcome period are all pre-determined. Each Series consists Read more […]

Defensive “Buffer Protect” Option Strategies Can Help Investors Stay the Course

Equities have historically offered promising growth potential, but we have seen time and again how suddenly and severely the equity markets can be affected by events that are difficult to predict, and 2019 is not likely to be an exception. Losses can have a greater impact on portfolios than gains because the money remaining after Read more […]

New All-Time Record – Open Interest for Cboe S&P 500 Options Surpasses 21 Million Contracts

While many investors are concerned about the fact that benchmark indexes for major investment classes are down year-to date, more investors are using S&P 500® options for goals related to risk management and income enhancement. On December 20 open interest for Cboe S&P 500 (SPX(SM) and SPXW) options surpassed 21 million for the first time Read more […]

Strong Returns Over 32+ Years for BXMD Index That Writes OTM SPX Options

In recent years at many investment conferences I heard that many public pension plans face underfunding challenges, and they are very interested in investments with strong returns and moderate risk. While past performance is not a guarantee of future results, the Cboe S&P 500 30-Delta BuyWrite Index (BXMDSM) has shown higher returns and lower volatility Read more […]

Growth in Use of S&P 500 Options at Cboe Over 35 Years

Thirty-five years ago, on July 1, 1983, Cboe® launched SEC-regulated S&P 500® (SPX) index options with posted volume of 350 contracts. Since 1983 there has been tremendous growth in SPX options volume, as many individual and institutional investors now use the contracts for purposes such as portfolio management, hedging, and income generation. Below are five Read more […]

A Smarter Way to Rebalance with the BuyWrite Index (BXM)

As advisors begin mid-year rebalancing of client portfolios, they face a dilemma. While investors have enjoyed a 9-year Bull Market—including a 21.14% total return by the S&P 500 in 2017—their investment portfolios have built up more equity risk. Absent rebalancing, a standard 60/40 equity/bond portfolio might now resemble a riskier 75/25 allocation. Given these sizable Read more […]

Innovation in Indexing: Incorporating Options in Indexes to Help Achieve Defined Investment Outcome as a Packaged Solution

For decades, sophisticated institutional investors have been using combinations of options to achieve desired investment outcomes or specific payoff structures. With innovations in indexing, it is now possible to gain passive exposure to those predefined outcome goals. Before we begin to explore how those index strategies are constructed and how such access may be possible, Read more […]