Cboe signs license agreement with Validus

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Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced that it has signed a license agreement with Validus Macro Strategies, a provider of rules-based options solutions for institutional investors, which creates the framework for Cboe and Validus to collaborate on the development of new indices and solutions.

Under this agreement, Cboe will have the exclusive rights to develop and offer a range of derivative indices and associated investable financial products using Validus’ proprietary methodologies. Cboe plans to initially launch a new series of dynamic Cboe Validus indices designed to show the performance of the active BuyWrite and PutWrite strategies on major US equity indices in the coming months. Additionally, Cboe may work with Validus to develop other active indices for unique index products in the future.

The new relationship reinforces Cboe’s growing global index business and builds on Cboe’s proven track record of creating and delivering some of the industry’s most innovative index offerings, including the Cboe Volatility Index® (VIX Index ®) and its suites of Strategic Performance Benchmarks and Target Results Indices.

Catherine Clay

“At Cboe, we seek to innovate to define markets that benefit all participants. It often starts with indexing, which has long been a core competency of Cboe,” said Catherine Clay, executive vice president, Data and Access Solutions at Cboe Global Markets.

“Cboe was a pioneer of strategic performance benchmarks, which continue to gain traction with investors looking to use options to hedge risk, reduce volatility and enhance returns. Validus offers a unique, rules-based methodology for building options strategies that we believe could further improve investment results, and we are excited to leverage their expertise to help develop additional index solutions. to meet customer demand.

“Validus is delighted to partner with Cboe Global Markets, a world leader in indices and index products. The combination of our risk-centric philosophy and derivatives expertise with Cboe’s focus on product innovation and world-class trading infrastructure creates the ideal platform for the development of exciting investment products and risk solutions,” said Kevin Lester, Managing Director of Validus Risk Management.

Validus’ proprietary methodologies differ from traditional options-based strategies in that they are both active and rules-based. Features such as option expirations, strikes or rollover dates are dynamically selected. The new dynamic Cboe Validus indices, unlike many benchmarks, are specifically designed to be used as investment strategies by a wide range of investors. The indices also take into account the commercial impact and take into account other operational aspects such as margin rules and the impact of interest rates.

“We are very excited and grateful for the opportunity to work with Cboe to bring investors innovative solutions based on our hands-on market experience,” said Kambiz Kazemi, chief investment officer at Validus Macro Strategies. “Markets have undergone major structural changes over the past two decades and the effect of these changes is becoming increasingly apparent to investors. Options-based strategies and indices are playing an increasingly crucial role in building portfolios and managing their risk. Through this partnership with Cboe, we look forward to bringing leading practical solutions to investors and helping them navigate the path forward.

The planned launch of the Cboe Validus Dynamic Indices will complement Cboe’s existing suite of strategic performance benchmarks, which aim to provide investors with an effective way to employ options strategies to enhance risk-adjusted returns within of their investment portfolio.

A BuyWrite, also known as a covered call, is generally considered an investment strategy in which an investor buys a stock or basket of stocks, and also sells call options that match the stock or basket of stocks. shares. A PutWrite typically involves writing put options to earn premiums.

As a leader in the creation and delivery of over 450 volatility and derivatives-based indices, Cboe is at the forefront of building an investment ecosystem that encompasses product design, computation , administration, listing, trading and referral licensing. To learn more, visit https://www.cboe.com/indices/

Source: Cboe

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