CHICAGO (HedgeWorld.com)—The Chicago Board of Options Exchange marks the 20th birthday of the world’s oldest broad-based stock index option today and announced the addition of two new regional listings.
Options on what is now known as the Standard & Poor’s 100 stock index (originally called the CBOE 100 Index) began trading on March 11, 1983 and reached a first-day volume of 4,827 contracts. By the end of its first year, OEX average daily volume had risen to more than 100,000 contracts, and it has since remained one of the most actively traded products in the world.
That September, the OEX became known as the S&P 100 Index pursuant to an agreement with Standard & Poor’s. Under the same agreement, the CBOE began listing options on the S&P 500 Index, too. The total volume for index options products in 1983 was roughly 10.7 million contracts. In 2002, the total volume was above 94.3 million.
In a statement celebrating the 20th anniversary, CBOE Chairman and Chief Executive William J. Brodsky observed that index options provide investors with an opportunity to maintain market exposure while limiting the risk and volatility associated with individual stocks in the equity markets. “Over the past two decades, index options have played an integral role in the evolution of the options industry and today are widely regarded as one of the most effective instruments for managing an investment portfolio,” Mr. Brosky said.
The CBOE also announced that on Friday, March 14, it would begin listing two new indexes—options based on the CBOE Asia 25 Index and options based on the CBOE Euro 25 Index.
