cboe binary options volatility index

Sep 22, 2008

(PRNewsfoto/Cboe Global Markets, Inc.)

CHICAGO, September 22, 2008 - Get-go Tuesday, September 23, Chicago Board Options Exchange (CBOE) will add put binary options on the S&P 500 Alphabetize (SPX)—ticker BSZ—and on the CBOE Volatility Index (VIX)—ticker BVZ. The contracts, which were launched in July, initially featured call options simply.

Binary options have only ii outcomes: a payoff of a prepare amount or naught at all. Buyers and sellers of binary options—which can be bought or sold throughout the life of the contract—volition know precisely how much can be made or lost if the positions are held to expiration. Call options pay $100 if the underlying alphabetize settles at or above the pre-set strike cost at expiration, or nothing at all if the index settles below the strike price. Put options pay $100 if the underlying index settles below the pre-gear up strike at expiration, or aught at all if the index settles at or higher up the strike toll.

In addition, because they are substitution-traded, CBOE binary options have clearing guarantees unavailable in over-the-counter markets.These options can exist traded in a regular securities brokerage account that is approved for options.

CBOE's binary options have experienced impressive volume early on, reaching equally much equally 10,000 to 12,000 contracts on some days and averaging 2,500 contracts daily during September. CBOE has seen strong institutional utilise of these contracts. Based on customer feedback, we fully await the improver of puts to spur more brokers-dealers to come on-line to handle binaries, thus enabling more individual investors to access these products.

The Designated Primary Market Maker (DPM) for binary options on the S&P 500 Index (ticker symbol BSZ) is Chicago Trading Company; the DPM for binary options on the CBOE Volatility Index (ticker symbol BVZ) is Group One Trading, L.P.

Contract Specifications

Identical for both contracts:

Multiplier: $100

Listed Contract Months: Initially, iii sequent, near-term contract months

Quotes: In pennies, ranging from 0 to 1.00

Minimum Tick Size: 0.01 points ($1.00)

Trading Hours: 8:30 a.one thousand. to three:fifteen p.m. Chicago time

Position Limits: 1,500,000 contracts on the same side of the market place
Contracts vary::

Last Trading Day and Expiration Dates:

*BSZ - Last trading twenty-four hours: Thursday before the third Friday of the expiration calendar month, and the options expire on the Saturday post-obit the tertiary Friday of the expiration month.
*BVZ - Last trading twenty-four hour period: Tuesday before the Wednesday that is thirty days prior to the third Fri of the calendar month immediately following the expiring month (e.k., October 21, Nov xviii and December 16, 2008). The options expire on the Wed that is 30 days prior to the third Friday of the calendar month immediately following the expiration month (e.g., October 22, November nineteen and December 17, 2008).

Strike Price Intervals: For BSZ, minimum interval of one point; for BVZ, minimum interval of five points

Settlement of Selection Exercise:

*For BSZ, the settlement value of the SPX (or "SET") volition exist used to determine if the binary choice is in, at or out of the money.
*For BVZ, the settlement value of the VIX (or "VRO") will be used to determine if the binary option is in, at or out of the money.
CBOE, the largest options market in the U.Due south. and the creator of listed options, is regulated past the Securities and Commutation Committee (SEC).For additional data nearly the CBOE and its products, access the CBOE website at: www.cboe.com.

CBOE Contacts:
Gail Osten
(312) 786-7123
osten@cboe.com

Gary Compton
(312) 786-7612
comptong@cboe.com

CBOE® and Chicago Board Options Exchange® are registered trademarks of Chicago Board Options Exchange, Incorporated.

This communication shall non constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in whatsoever state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

In connectedness with the proposed restructuring transaction, CBOE Holdings, Inc. ("CBOE Holdings") has filed certain relevant materials with the The states Securities and Exchange Commission (SEC), including a registration argument on Class S-4. Members are encouraged to read the registration statement, including the proxy argument/prospectus that are a part of the registration statement, because information technology contains important information about the proposed transaction. Members are able to obtain a gratis re-create of the proxy argument/prospectus, as well equally the other filings containing information nigh CBOE Holdings and the Chicago Lath Options Commutation, Incorporated ("CBOE"), without accuse, at the SEC's Web site, http://www.sec.gov/, and the companies' website, http://www.cboe.com/.In addition, CBOE members may obtain free copies of the proxy argument/prospectus and other documents filed by CBOE Holdings or the CBOE from CBOE Holdings by directing a asking to the Part of the Secretarial assistant, CBOE Holdings, Inc., 400 Due south LaSalle Street, Chicago, Illinois 60605.

CBOE Holdings, the CBOE and their respective directors, executive officers and other employees may be accounted to be participants in the solicitation of proxies in connexion with the proposed transaction. Information nigh the directors and executive officers of CBOE Holdings and of the CBOE is available in the prospectus/proxy argument.
Options involve chance and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are bachelor from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and data purposes and therefore should non exist considered complete, precise, or current. Many of the matters discussed are field of study to detailed rules, regulations, and statutory provisions which should exist referred to for additional particular and are subject to changes that may not be reflected in the website information. No statement inside the website should be construed as a recommendation to purchase or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of whatever product, service, or website. The Terms and Conditions govern employ of this website and use of this website will exist deemed acceptance of those Terms and Conditions.

Click here to view the full press release.

Source: https://ir.cboe.com/news-and-events/2008/09-22-2008/cboe-adds-put-binary-options-sp-500r-index-spxsm-and-cboe-volatility-indexr-vixr-providing-new-dimension-simple-strategy

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