CBOE set to open London hub for trading on Vix index futures

 
City A.M. Reporter
CBOE, which runs the oldest and largest US stock-options exchange, is planning to open a base in London for its fast-growing futures market as it tries to woo more clients from abroad.

CBOE Futures Exchange will establish its first non-US hub in a London data centre next year, it said in a statement yesterday. The exchange offers trading in contracts tied to CBOE’s popular VIX index, which investors use to bet on stock-market volatility.

The exchange also plans to extend trading hours for the contracts to nearly 24 hours from the current eight hours offered. Trading in the contracts before the open of the US stock markets currently accounts for five per cent to eight per cent of daily volume, the exchange said.

Although CBOE has long focused largely on theUS market, it has increasingly sought customers elsewhere, joining other US financial exchanges hit by sluggish trading at home and eying overseas expansion for growth. A London hub would give electronic traders there much faster access to CBOE’s contracts than connecting to New York or Chicago.

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