CBOE Acquires Majority Equity Investment in Vest Financial

The Chicago Board Options Exchange (CBOE) Holdings, Inc. (NASDAQ: CBOE) has undergone a majority equity investment in Vest Financial Group Inc., an investment provider of options-centric products, according to a CBOE statement.

CBOE's opted to fund its investment in Vest Financial via its existing cash. Despite the timing of the acquisition, the deal will not yield any material in the 2016 revenues or earnings of CBOE Holdings, Inc. However, CBOE is openly optimistic about the potential for growth in the long-term, which explains the impetus behind the deal.

Consequent to the investment, Vest Financial will become a majority-owned subsidiary of CBOE – this will not result in wholesale management changes however, as Karan Sood will continue to lead the group as CEO. However, Bill Kung, Vest Financial's former CEO, is slated to step down and relinquish his current role as President to instead focus on Vest's technology solutions business.

The Vest Financial acquisition is important for CBOE as it will help allow for an augmented assimilation of CBOE's overall product suite, strategy indexes and options expertise into Vest Financial's existing platform. Vest is also still on target to launch Unit Investment Trusts (UITs), Mutual Funds and Exchange Traded Products (ETPs).

According to Edward T. Tilly, Chief Executive Officer (CEO) of CBOE, in a recent statement on the investment: “We are delighted to announce our investment in Vest. We're looking forward to an ongoing collaboration between CBOE and the highly talented Vest team.”

“CBOE and Vest share a passion for advancing options innovation and are closely aligned philosophically. Our investment in Vest is a major step forward in our ability to democratize the Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term properties of options and Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term trading," he added.

"This alliance provides an even stronger partner for our customers. CBOE is globally recognized as a leading exchange for derivative products and has a rich history of product innovation, making them the ideal strategic partner for us going forward. Joining forces with CBOE will enable Vest to offer the broadest portfolio of industry-leading, innovative options-based investment solutions to an even wider range of customers," noted Karan Sood, CEO and Co-Founder of Vest in an accompanying statement.