Cboe Revives Mini VIX Product Aimed at CTAs, Retail Traders

(Bloomberg) -- Cboe Global Markets Inc. is looking to cater to smaller-scale traders who have embraced options in recent months as volatility increased.

The Chicago-based firm’s Cboe Futures Exchange is planning to relaunch mini futures on the Cboe Volatility Index, or VIX, which it had offered from 2009 to 2014, according to a filing with the Commodity Futures Trading Commission dated June 9. It aims to debut the VXM product later this year, pending regulatory approval. Commodity Trading Advisors, “sophisticated” retail investors and proprietary-trading firms could be among potential users, according to the filing.

“Volatility trading and customer demands have evolved and volatility as a tradeable asset class has matured,” Matt McFarland, vice president and head of futures at Cboe Futures Exchange, said via email. “The volatility strategies of smaller, sophisticated market participants has developed to now include seeking direct access to VIX futures.”

Retail investors have been making their mark not just on the overall investing landscape, but in options in particular. Smaller options traders have accounted for a large portion of “stunning” speculative fervor in U.S. trading, Sundial Capital Markets said recently. That’s on top of evidence that retail buyers are behind the rally in beaten-down shares that’s been dominating the rally lately.

Cboe Revives Mini VIX Product Aimed at CTAs, Retail Traders

The size of Mini VIX futures contracts is a tenth that of VIX futures -- $100 rather than $1,000.

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