New Futures Contract Announced By CME For Nasdaq-100 Volatility Index

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CME Group Inc, the international derivatives marketplace, has partnered up with Nasdaq to announce plans for a new futures contract, today. This futures contract will be listed within the Nasdaq-100 Volatility Index, or VOLQ.

New Innovations Constantly Made

Pending regulatory review, CME Group is planning to launch these new futures contracts within the Nasdaq-100 Volatility Index on the 5th of October, 2020

The VOLQ Index was introduced by Nasdaq early in 2019, and measures the 30-day implied volatility of the Nasdaq-100 Index (NDX). This was done to help market participants understand and manage portfolio volatility in a better way.  VOLQ stands as a real-time volatility index, expressed by the prices of certain listed NDX options. With this, it’s capable of obtaining at-the-money, accurate prices for options, as well as seeing which options are the most commonly used by market participants.

Gaining Insight On Volatility

With this innovative approach available, volatility traders are capable of leveraging the implied volatility index, one that focuses on the options that hedgers, strategists, and traders increasingly use.

This new futures contract will be cash-settled, and based on the VOLQ Index itself. The basis of it will be that one contract is equal to $1,000 multiplied by the index. As one would expect. VOLQ futures will also be subject to the rules of CME, and will be listed by it as well

The Mandatory Kind Words

Tim McCourt stands as the Global Head of Equity Index and Alternative Investment Products at CME Group, and gave comment about the matter at large. He explained that CME Group is pleased to renew the successful and longstanding relationship it has with Nasdaq, doing so through the listing of these new futures contracts on the VOLQ Index.

He explained that VOLQ futures would directly respond to a growing demand for tools to hedge volatility exposure of portfiolios. Alongside this, it offers to trade at-the-money volatility within a leading global benchmark equity index. This index, of course, is in reference to the Nasdaq-100.

Alongside this, McCourt highlighted that it would complement its highly liquid futures and options product line for Nasdaq, including that of its Micro E-mini and E-Mini Nasdaq-100 contracts.

Lauren Dillard stands as the Head of Global Information Services and EVP of Nasdaq. Dillard stated that the Nasdaq-100 index keeps track of the most innovative companies the world has to offer, and has demonstrated resilience and strength through its outstanding performance. With the VOLQ index, Dillard stated that investors are capable of tracking the volatility of Nasdaq-100.

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