The Long and Short of Futures Options: Talking Volatility, Indices and ETFs

In this episode, Mark is joined by Scot Warren, Senior Managing Director of Equity Index Products at CME Group.

What to Know: An overview of the deal CME struck with McGraw-Hill for the S&P indices.

• Is this joint venture as a great way to help penetrate developing and emerging markets outside the USA?
• Scott walks through the deal to license the VIX methodology from the CBOE as well.
• An update on the NYMEX crude oil VIX and the Gold VIX
• Is there any plan to take the next step into an actual, tradable soybean and/or corn VIX right now?
• Are there any plans to continue licensing the realized vol methodology for the vol contracts on the Euro, or other methodologies?

What's New: It's time for volume numbers, an overall down month. Does CME's options complex follow in similar suit? The short duration contracts have really diverge into two use-cases, between equity options and futures options.

What to Watch:

• Updates on the development you have coming down the pipe in ETF options.
• Will mini options going to be another new product trend that you continue to push going forward?
• What other platform and tools upgrades can a futures options trader expect in the near future?
• Are you happy to know you have the best offering from a spread perspective for options traders?
• Do you see incentivizing the professional audience as an important initiative for the CME?

What's on Your Mind: Taking on Listener questions

• Does the CME's licensing deal with the S&P mean that they can trade SPX contracts at the CME? If not, then what about when the CME license expires? Does the CME plan to list SPX at that time? (Via email from Tim W., Tacoma, WA)
• Trading Futures on Apple. The CME has completely missed out on the explosion of interest in single name equities, like Apple, Google, etc., I'd imagine this should be a very interesting business for them. Are there any plans to revitalize the single stock futures market. Perhaps through 1 Chicago, so the CME can list futures and options, and futures options on single name equities. Also, if possible, I would long to have Long and Short of Futures Options come out more frequently than once a month. Right now this is pretty much the only futures options game in town, so we need more of it. (Via The Options Insider forum from Monkey Boy)
• What are CME group's plans for the VIX license or more tradable products on the horizon? (Via Twitter from Alex103)