CBOE Holdings, Inc has said that it plans to expand its suite of product offerings tied to S&P Dow Jones Indices with the planned launch of options on the 10 S&P Select Sector Indices that comprise the S&P 500®, a key benchmark of the U.S. equities market. The new index options will offer investors across the globe new ways to efficiently incorporate U.S. sector investing strategies into their portfolios.
CBOE Select Sector Index options are designed to provide simple, straightforward market exposure to widely followed U.S. equity sectors represented in the S&P 500. In particular, European investors who cannot currently hold options on exchange-traded funds (ETFs) due to obstacles presented by certain European regulations will be able to implement sector-investment strategies popular with U.S. investors. The new options offer all investors the benefits of cash settlement, with third-Friday (monthly) expirations and European-style exercise, similar to CBOE’s S&P 500 options.
Pending regulatory approval, the options are expected to be exclusively listed on Chicago Board Options Exchange, the largest of CBOE Holdings’ four options exchanges, and are expected to launch in late fourth-quarter 2017 or early 2018.
CBOE Holdings President and Chief Operating Officer Chris Concannon made the announcement regarding the new options today during his remarks to attendees of the 6th annual CBOE Risk Management Conference (RMC) Europe, currently taking place near London.
“We are excited that we will be able to provide exposure to these key U.S. sector indices for European customers who have been keen to incorporate U.S. sector investing strategies into their portfolios, but have not had access to an efficient trading vehicle to realize this strategy,” Mr. Concannon said.
“We also are happy to extend our partnership with S&P Dow Jones Indices with these products,” he added. “CBOE Select Sector Index options will offer European asset managers and investors the targeted exposure to U.S. equity sectors they have been missing, and also give U.S. asset managers a new avenue for options investment.”
All components of the S&P 500 are assigned to at least one of the following 10 S&P Select Sector Indices. The new CBOE Select Sector Index options will be available on each of these benchmark indices:
|S&P Financial Select Sector Index||IXM||SIXM|
|S&P Energy Select Sector Index||IXE||SIXE|
|S&P Technology Select Sector Index||IXT||SIXT|
|S&P Health Care Select Sector Index||IXV||SIXV|
|S&P Utilities Select Sector Index||IXU||SIXU|
|S&P Consumer Staples Select Sector Index||IXR||SIXR|
|S&P Industrials Select Sector Index||IXI||SIXI|
|S&P Consumer Discretionary Select Sector Index||IXY||SIXY|
|S&P Materials Select Sector Index||IXB||SIXB|
|S&P Real Estate Select Sector Index||IXRE||SIXRE|
“For more than 60 years, the S&P 500 has been regarded as the premier barometer of the U.S. stock market,” said Reid Steadman, Managing Director and Head of Product Management at S&P Dow Jones Indices. “The increasing interest in index-based concepts and sector strategies is an example of market participants’ strong demand for transparent and efficient exposure to all asset classes. We are pleased to see CBOE list these 10 index options exclusively.”