Cboe Global Markets Plans to Expand Credit Futures Offering with Launch of Cboe? iBoxx? $ Emerging Market Bond Index Futures

BY PR Newswire | CORPORATE | 05/29/24 09:00 AM EDT
  • Cboe? iBoxx? $ Emerging Market Bond Index (IEMD) futures to provide exposure to emerging market debt
  • Futures expected to begin trading on June 17, subject to regulatory review
  • Offering expands Cboe's current credit toolkit, which includes U.S. corporate bond futures and options on futures

CHICAGO, May 29, 2024 /PRNewswire/ -- Cboe Global Markets, Inc. , the world's leading derivatives and securities exchange network, announced plans to list Cboe? iBoxx? $ Emerging Market Bond Index futures for trading on Cboe Futures Exchange, LLC (CFE) beginning on June 17, subject to regulatory review. The IEMD futures will be based on the S&P Dow Jones Indices' iBoxx? USD Liquid Emerging Market Sovereigns & Sub-Sovereigns Index .

(PRNewsfoto/Cboe Global Markets, Inc.)

IEMD futures are designed to offer investors exposure to U.S. dollar denominated bonds issued by governments or sub-sovereign issuers from emerging market countries. For current and potential emerging market debt investors, IEMD futures could be used to hedge existing exposures, implement relative value strategies against other?fixed income?instruments and manage interest rate and credit risk. IEMD futures will be exchange-traded and centrally cleared, which will help provide operational simplicity and limit counterparty risk compared to over-the-counter instruments.

As of April 30, 2024, the iBoxx? USD Liquid Emerging Market Sovereigns & Sub-Sovereigns Index?had 535 constituents across 46 emerging market countries, including Mexico, Argentina and the United Arab Emirates, and an estimated aggregate amount outstanding of $1.03 trillion. The index methodology is designed to include bonds with at least $1 billion amount outstanding at rebalancing, and does not include any country that is in default on its external debt or subject to financial sanctions by the United States or European Union. ??

"We are excited to build upon Cboe's ongoing collaboration with S&P Dow Jones Indices and expand Cboe's credit market offerings to include emerging market futures," said Rob Hocking, Senior Vice President and Head of Product Innovation at Cboe Global Markets. "Cboe changed the way investors traded volatility 20 years ago with the launch of VIX futures, and today we continue to innovate and strategically offer new ways to manage risk across asset classes. Whether investors or fund managers are looking to hedge current positions or gain broad exposure to the market for bonds issued by governments or sub-sovereign issuers from emerging market countries, IEMD futures are designed to provide that exposure in a U.S. regulated and capital efficient manner."

"S&P Dow Jones Indices' iBoxx? USD Emerging Markets Broad Index Series was launched in January 2024 to offer global investors an independent market performance gauge to support their renewed and growing interest in shorter duration, higher yielding fixed income exposures to developing markets for risk management and diversification purposes," said Frans Scheepers, Global Head of Fixed Income, Currency and Commodities Products at S&P Dow Jones Indices. "S&P DJI is pleased to license the iBoxx? USD Liquid Emerging Market Sovereigns & Sub-Sovereigns Index, which was launched in March 2024, and is designed specifically for use with tradable products to Cboe, further strengthening the liquid ecosystem of financial products that are tracking our innovative and pioneering fixed income benchmarks."

IEMD futures will be cash-settled and available to trade at nearly 24-hours per weekday, allowing investors across the globe to manage risk more efficiently. CFE plans to list for trading up to four near-term serial contract months and four contract months on the March quarterly cycle for IEMD futures.

In addition to IEMD futures, CFE currently offers investors exposure to high yield and investment grade U.S. corporate debt through its Cboe? iBoxx? iShares? Bond Index futures and options on futures offering. The products are designed to allow users to hedge and mitigate corporate bond credit risk with exchange traded, centrally cleared products.

To learn more about CFE and its offerings, visit Cboe U.S. Futures Exchange Overview.

About Cboe Global Markets, Inc.

Cboe Global Markets , the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.

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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 in futures and 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. Certain risks associated with options, futures, and options on futures and certain disclosures relating to information provided regarding these products are also highlighted at?https://www.cboe.com/us_disclaimers.?

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The iBoxx iShares $ High Yield Corporate Bond Index and the iBoxx iShares $ Investment Grade Corporate Bond Index ("iBoxx iShares $ Corporate Bond Indices") and the iBoxx? USD Liquid Emerging Market Sovereigns & Sub-Sovereigns Index are products of S&P Dow Jones Indices LLC or its affiliates or licensors ("S&P DJI") and have been licensed for use by Cboe Exchange, Inc. iBoxx?, S&P?, S&P 500?, SPX, US 500, The 500, DSPX, DSPBX, iTraxx, CDX and Dividend Aristocrats? are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones? is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and has been licensed for use by S&P Dow Jones Indices; and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by Cboe Exchange, Inc. Cboe? iBoxx? iShares? $ High Yield Corporate Bond Index futures and options on futures, Cboe? iBoxx? iShares? $ Investment Grade Corporate Bond Index futures and options on futures, and Cboe? iBoxx? $ Emerging Market Bond Index futures are not sponsored, endorsed, sold, or promoted by S&P DJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the iBoxx iShares $ Corporate Bond Indices or the iBoxx? USD Liquid Emerging Market Sovereigns & Sub-Sovereigns Index.?

The iBoxx??iShares??$ High Yield Corporate Bond Index and the iBoxx??iShares??$ Investment Grade Corporate Bond Index (the "Indexes"), futures contracts on the Indexes and options on futures contracts on the Indexes ("Contracts") are not sponsored by, or sold by BlackRock, Inc. or any of its affiliates (collectively, "BlackRock"). BlackRock makes no representation or warranty, express or implied to any person regarding the advisability of investing in securities, generally, or in the Contracts in particular. Nor does BlackRock make any representation or warranty as to the ability of the Index to track the performance of the fixed income securities market, generally, or the performance of HYG, LQD or any subset of fixed income securities.

BlackRock has not calculated, composed or determined the constituents or weightings of the fixed income securities that comprise the Indexes ("Underlying Data"). BlackRock is not responsible for and has not participated in the determination of the prices and amounts of the Contracts, or the timing of the issuance or sale of such Contracts or in the determination or calculation of the equation by which the Contracts are to be converted into cash (if applicable). BlackRock has no obligation or liability in connection with the administration or trading of the Contracts. BlackRock does not guarantee the accuracy or the completeness of the Underlying Data and any data included therein and BlackRock shall have no liability for any errors, omissions or interruptions related thereto.

BlackRock makes no warranty, express or implied, as to results to be obtained by S&P DJI, the parties to the Contracts or any other person with respect to the use of the Underlying Data or any data included therein. BlackRock makes no express or implied warranties and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Underlying Data or any data included therein. Without limiting any of the foregoing, in no event shall BlackRock have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) resulting from the use of the Underlying Data or any data included therein, even if notified of the possibility of such damages.

iShares??is a registered trademark of BlackRock Fund Advisors and its affiliates.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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