The Chicago Board Options Exchange Holdings (CBOE), (NASDAQ: CBOE) has announced its plans to launch options on 10 S&P Select Sector Indices that comprise the S&P500, a key benchmark for US equity market. The new index option will be offered to clients globally and will help to efficiently incorporate US sector investing strategies into their portfolios.
The new index options are designed to provide straightforward market exposure to the widely followed US equity sectors represented in the S&P 500 index. It will be beneficial for European investors who could not hold options on ETFs due to certain regulations by European authorities - they will now be able to carry out sector investment strategies popular with US investors. It will be offered with the benefit of cash settlement, with monthly expiration dates and European-style exercises similar to the CBOE’s S&P 500 options.
The new index options are expected to be launched in late fourth-quarter 2017 or early 2018, subject to regulatory approval. All new index options will be exclusively listed on CBOE. The following Select Sector Index options will be launched:
- S&P Financial Select Sector Index (SIXM)
- S&P Energy Select Sector Index (SIXE)
- S&P Technology Select Sector Index (SIXT)
- S&P Health Care Select Sector Index (SIXV)
- S&P Utilities Select Sector Index (SIVU)
- S&P Consumer Staples Select Sector Index (SIXR)
- S&P Industrials Select Sector Index (SIXI)
- S&P Consumer Discretionary Select Sector Index (SIXY)
- S&P Materials Select Sector Index (SIXB)
- S&P Real Estate Select Sector Index (SIXRE)
CBOE Holdings President and CEO Chris Concannon made the announcement in the 6th annual CBOE Risk Management Conference (RMC) in London. He said: "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." 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."
Reid Steadman, Managing Director and Head of Product Management at S&P Dow Jones Indices, commented on the development: "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."
