• New volatility-related index, jointly developed by S&P Dow Jones Indices and Cboe, is designed to provide representation of implied dispersion for the S&P 500 Index
• Aims to help market participants better understand portfolio diversification benefits and implement dispersion trading strategies
• Index is first concept developed by Cboe Labs, company's newly-formed innovation arm focused on new tradable products and services

CHICAGO and REYKJAVIK, Iceland, Oct. 19, 2022 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to collaborate with S&P Dow Jones Indices (S&P DJI), the world's leading index provider, to develop the Cboe S&P 500 Dispersion Index at its global Risk Management Conference (RMC) in Reykjavik, Iceland.

For a well-diversified portfolio, dispersion is a measure of the spread of constituent returns over a defined period, such as a month.  In practice, dispersion measures both the opportunity set for individual security selection within a portfolio, as well as the potential diversification achieved by their combination.  Akin to the way that the Cboe Volatility Index® (VIX® Index) represents implied volatility of the S&P 500, the Cboe S&P 500 Dispersion Index is intended to represent the implied dispersion among S&P 500 constituents over a 1-month horizon, based on the prices of single stock and index options. 

"Cboe has been teaching market participants how to better measure, model and trade market moves through the 450-plus volatility and derivatives-based indices we've created over our nearly 50-year history," said John Hiatt, Vice President, Cboe Labs. "We revolutionized investing with the creation of the VIX® Index, the first index to measure the market's expectation of future volatility — and today, we continue our legacy of innovation with the Cboe S&P 500 Dispersion Index."

"Dispersion is recognized as one of the fundamental metrics of market risks. Unlike related measures of volatility, there hasn't yet been a simple, tradeable, and standardized index that enables market participants to hedge and express their views on dispersion in the U.S. equity markets," said Tim Edwards, Global Head of Index Investment Strategy at S&P Dow Jones Indices. "We are excited to collaborate with Cboe on the development of the Cboe S&P 500 Dispersion Index, to bring more transparency to the risk and opportunity set in the world's most liquid equity benchmark."

Edwards will join Hiatt at RMC for a discussion and analysis of dispersion, underscoring the strength of Cboe and S&P DJI's long-standing relationship and highlighting the companies' shared commitment to drive innovation through rigorous data analysis and academic research. For decades, the campus-like setting and facilitated networking at RMC has provided Cboe staff with the unique ability to learn from and work closely with industry peers, customers and academics—inspiring the creation of new Cboe offerings that can enhance the trading experience.

In an effort to formalize the value derived from conversations at RMC and other client interactions, the company also announced the formation of Cboe Labs, a new division dedicated to the creation, development and implementation of new ideas. 

"Driven by constant input from our customer base, Cboe Labs is a place where we research, test and iterate as rapidly as possible with a singular goal— to create value-add, disruptive, tradable products and services," said Rob Hocking, Senior Vice President and Head of Cboe Labs. "Cboe Labs builds on our history of producing many 'firsts' for the market and the ongoing dialogue we have with industry peers and regulators on the issues impacting the markets."

The Cboe S&P 500 Dispersion Index is the first idea from Cboe Labs that will become reality. Cboe plans to develop a futures product on the index to be listed on Cboe Futures Exchange, subject to finalization of the methodology and regulatory review. To learn more about dispersion and correlation, visit www.cboe.com/us/indices/implied

About Cboe Global Markets, Inc.

Cboe Global Markets (Cboe: CBOE), a leading provider of market infrastructure and tradable products, delivers cutting-edge trading, clearing and investment solutions to market participants around the world. The company is committed to operating a trusted, inclusive global marketplace, providing leading products, technology and data solutions that enable participants to define a sustainable financial future. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX and digital assets across North America, Europe and Asia Pacific. To learn more, visit www.cboe.com.

CBOE-OE

Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX® are registered trademarks. S&P®, S&P 500®, SPX®, The 500, US 500  are trademarks of S&P Dow Jones Indices LLC or its affiliates (collectively, "S&P DJI"), and have been licensed for use by Cboe Exchange, Inc. All other trademarks and service marks are the property of their respective owners.

Any products that have the Cboe S&P 500 Dispersion Index or other S&P Index or Indexes as their underlying interest are not sponsored, endorsed, sold or promoted by Standard & Poor's or Cboe and neither S&P DJI nor Cboe make any representations or recommendations concerning the advisability of investing in products that have the Cboe S&P 500 Dispersion or other  S&P indexes as their underlying interests. All other trademarks and service marks are the property of their respective owners.

There are important risks associated with transacting in any of the Cboe Company products discussed here.  Before engaging in any transactions in those products, it is important for market participants to carefully review the disclosures and disclaimers contained at:  https://www.cboe.com/us_disclaimers/.

Options involve risk and are not suitable for all market participants. Prior to buying or selling an option, a person should review the  Characteristics and Risks of Standardized Options (ODD), which is required to be provided to all such persons.  Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606.

Trading in futures and options on futures is not suitable for all market participants and involves the risk of loss, which can be substantial and can exceed the amount of money deposited for a futures or options on futures position. You should, therefore, carefully consider whether trading futures or options on futures is suitable for you in light of your circumstances and financial resources. You should put at risk only funds that you can afford to lose without affecting your lifestyle. For additional information regarding the risks associated with trading futures and options on futures and with trading security futures, see respectively the Risk Disclosure Statement Referenced in CFTC Letter 16-82 and the Risk Disclosure Statement for Security Futures Contracts.

Cboe Global Markets, Inc. and its affiliates do not recommend or make any representation as to possible benefits from any securities, futures or investments, or third-party products or services. Cboe Global Markets, Inc. is not affiliated with S&P. Investors should undertake their own due diligence regarding their securities, futures and investment practices. This press release speaks only as of this date. Cboe Global Markets, Inc. disclaims any duty to update the information herein.  Nothing in this announcement should be considered a solicitation to buy or an offer to sell any securities or futures in any jurisdiction where the offer or solicitation would be unlawful under the laws of such jurisdiction. Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation.

Cboe Global Markets, Inc.  and  its  affiliates, to the maximum extent permitted by applicable law,  make  no  warranty,  expressed  or  implied,  including,  without  limitation,  any  warranties  as  of  merchantability,  fitness  for  a particular  purpose,  accuracy,  completeness  or  timeliness,  the  results to  be  obtained  by  recipients  of  the  products  and  services  described  herein, or as to the ability of the S&P 500 index to track the performance of its strategy, and shall not in any way be liable for any inaccuracies or errors.  Cboe Global Markets, Inc. and its affiliates have not calculated, composed or determined the constituents or weightings of the securities that comprise the third-party indices referenced in this press release and shall not in any way be liable for any inaccuracies or errors in any of the indices referenced in this press release. 

RMC is an educational event for qualified institutional users of equity derivatives (such as institutional money managers, pension fund managers and consultants, insurance company professionals, or other financial industry professionals). The conference is not intended or suitable for individual investors. Attendance is limited to qualified, approved registrants. Registration and sponsorship may be restricted and may be approved at the discretion of the conference organizers.

Cautionary Statements Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements.

We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security risks, cybersecurity risks, insider threats and unauthorized disclosure of confidential information; our ability to attract and retain skilled management and other personnel; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; fluctuations to currency exchange rates; factors that impact the quality and integrity of our indices; the impact of the novel coronavirus ("COVID-19") pandemic; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; our ability to manage our growth and strategic acquisitions or alliances effectively; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the accuracy of our estimates and expectations; litigation risks and other liabilities; and operating a digital asset business and clearinghouse, including the expected benefits of our ErisX acquisition, cybercrime, changes in digital asset regulation, losses due to digital asset custody, and fluctuations in digital asset prices. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2021 and other filings made from time to time with the SEC.

We do not undertake, and we expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

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SOURCE Cboe Global Markets, Inc.