Cboe Introduces New Cash-Settled Futures and Options Targeting U.S. Tech Stocks
In a notable development for traders and investors alike, Cboe Global Markets, the foremost derivatives and securities exchange globally, has announced its plans to launch new cash-settled futures and options revolving around the innovative Cboe Magnificent 10 Index. This announcement comes amidst a growing appetite from retail investors for derivatives that offer targeted exposure to highly traded tech stocks in the United States.
The Cboe Magnificent 10 Index, which is set to make its debut soon, is designed as a thematic, equal-weighted benchmark. It will track the price return of a carefully selected group of 10 U.S.-listed large-cap tech stocks, primarily emphasizing firms that are driving growth in the technology sector. The components of this index include the well-known Magnificent 7 stocks—Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia, and Tesla—alongside Advanced Micro Devices (AMD), Broadcom, and Palantir. This diversified index aims to provide investors with a robust mechanism to gain exposure to dynamic elements of the equity landscape in the U.S.
Cboe's new product offerings include options and futures that allow nearly round-the-clock trading up to 24 hours a day, five days a week. With this initiative, the exchange not only caters to the needs of retail investors but also enhances the execution capabilities for institutional traders. Cathy Clay, Cboe’s Global Head of Derivatives, spoke at the recent HOOD Summit in Las Vegas, highlighting the demand for more strategic ways to approach market-dominating stocks. She noted that these products are strategically designed to help traders mitigate risks associated with individual stocks, effectively reducing concentration risk by allowing investors to manage their exposure within this curated basket.
The MGTEN options will be cash-settled, maintaining a European-style format that differentiates them from traditional stock options which can involve physical delivery and early exercise risks. This presents an attractive feature for traders looking for flexibility and efficiency in their trading strategies. Moreover, in addition to standard monthly A.M.-settled expirations, Cboe plans to offer weekly P.M.-settled options, including zero-days-to-expiry (0DTE) options, which have seen a marked increase in popularity due to their capacity for tactical hedging and intraday risk management.
The forthcoming cash-settled MGTEN futures are anticipated to be a game-changer, providing a capital-efficient way to gain exposure to top-tier tech stocks via a singular, tradeable product. This feature allows investors to not only hedge and speculate but also to carry out short positions without needing to manage multiple entries. Futures, by design, empower investors to fine-tune risk exposure with leverage, allowing for larger trades with reduced upfront costs.
Cboe aims to launch the monthly options and futures related to the MGTEN Index in the latter part of 2025, with the weekly options following in early 2026. This timeline, of course, remains contingent on obtaining the necessary regulatory approvals. Upon launch, trading for MGTEN Index futures and options will initially be available during standard trading hours, with plans to extend trading hours in the future to accommodate a global trading audience.
In reflecting upon this cutting-edge initiative by Cboe, it's clear that this new index and its related products stand to reshape how traders interact with the exciting sectors of the market. For anyone serious about maintaining a competitive edge in trading, these innovations provide not just options for exposure, but rich opportunities to capitalize on the ever-evolving landscape of technology-driven companies.
For more updates, and to learn about the MGTEN Index and its product offerings, you can visit Cboe's pre-launch resource hub. Cboe Global Markets remains dedicated to not only advancing trading solutions but also to ensuring a secure and integrated marketplace as it continues to expand its global footprint in the derivatives market.
The Cboe Magnificent 10 Index, which is set to make its debut soon, is designed as a thematic, equal-weighted benchmark. It will track the price return of a carefully selected group of 10 U.S.-listed large-cap tech stocks, primarily emphasizing firms that are driving growth in the technology sector. The components of this index include the well-known Magnificent 7 stocks—Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia, and Tesla—alongside Advanced Micro Devices (AMD), Broadcom, and Palantir. This diversified index aims to provide investors with a robust mechanism to gain exposure to dynamic elements of the equity landscape in the U.S.
Cboe's new product offerings include options and futures that allow nearly round-the-clock trading up to 24 hours a day, five days a week. With this initiative, the exchange not only caters to the needs of retail investors but also enhances the execution capabilities for institutional traders. Cathy Clay, Cboe’s Global Head of Derivatives, spoke at the recent HOOD Summit in Las Vegas, highlighting the demand for more strategic ways to approach market-dominating stocks. She noted that these products are strategically designed to help traders mitigate risks associated with individual stocks, effectively reducing concentration risk by allowing investors to manage their exposure within this curated basket.
The MGTEN options will be cash-settled, maintaining a European-style format that differentiates them from traditional stock options which can involve physical delivery and early exercise risks. This presents an attractive feature for traders looking for flexibility and efficiency in their trading strategies. Moreover, in addition to standard monthly A.M.-settled expirations, Cboe plans to offer weekly P.M.-settled options, including zero-days-to-expiry (0DTE) options, which have seen a marked increase in popularity due to their capacity for tactical hedging and intraday risk management.
The forthcoming cash-settled MGTEN futures are anticipated to be a game-changer, providing a capital-efficient way to gain exposure to top-tier tech stocks via a singular, tradeable product. This feature allows investors to not only hedge and speculate but also to carry out short positions without needing to manage multiple entries. Futures, by design, empower investors to fine-tune risk exposure with leverage, allowing for larger trades with reduced upfront costs.
Cboe aims to launch the monthly options and futures related to the MGTEN Index in the latter part of 2025, with the weekly options following in early 2026. This timeline, of course, remains contingent on obtaining the necessary regulatory approvals. Upon launch, trading for MGTEN Index futures and options will initially be available during standard trading hours, with plans to extend trading hours in the future to accommodate a global trading audience.
In reflecting upon this cutting-edge initiative by Cboe, it's clear that this new index and its related products stand to reshape how traders interact with the exciting sectors of the market. For anyone serious about maintaining a competitive edge in trading, these innovations provide not just options for exposure, but rich opportunities to capitalize on the ever-evolving landscape of technology-driven companies.
For more updates, and to learn about the MGTEN Index and its product offerings, you can visit Cboe's pre-launch resource hub. Cboe Global Markets remains dedicated to not only advancing trading solutions but also to ensuring a secure and integrated marketplace as it continues to expand its global footprint in the derivatives market.
Topics Financial Services & Investing）
【About Using Articles】
You can freely use the title and article content by linking to the page where the article is posted.
※ Images cannot be used.
【About Links】
Links are free to use.