Nasdaq Gets SEC Green Light for Volatility Index Options
US stock operator Nasdaq has received approval from the Securities and Exchange Commission (SEC) to launch options on its Nasdaq-100 volatility index (VOLQ).
Following the SEC’s approval for the options on May 5, the Nasdaq announced plans to launch later this year.
VOLQ was first introduced by the Nasdaq in 2019 and measures the 30-day implied volatility of the Nasdaq-100 (NDX) index to help traders better understand and manage volatility.
It reflects the prices of NDX options to obtain accurate and at-the-money option prices, and is primarily used by options market participants.
The launch of the VOLQ options is part of Nasdaq’s partnership with the US derivatives exchange CME Group, which confirmed in August last year that it had plans with the Nasdaq to launch futures contracts based on the volatility index on October 5, subject to regulatory review.
“VOLQ futures contracts directly respond to the growing demand for tools to hedge portfolio volatility exposure or trade for-the-money volatility on a leading global benchmark stock index, the Nasdaq-100,” said said CME Group Global Head of Equity Indices and Alternative Investment Products, Tim McCourt.
“In addition, they will complement our lineup of highly liquid Nasdaq futures and options, including the E-mini and Micro E-mini Nasdaq-100 benchmarks.”
Shortly after confirming its intention to launch VOLQ futures, CME Group in September unveiled a new forex options volatility tool that aims to further help traders monitor price relationships for better price quality. execution during periods of volatility.