Cboe expands to 23-hour trading for select corporate bond futures

Move comes as the exchange launches two new options products based off its investment grade and high yield corporate bond index futures.

Cboe has expanded the trading period for in its high yield and investment grade corporate bond futures to nearly 24-hours per weekday to help investors manage their credit portfolios.

Cboe Futures Exchange (CFE) launched IBHY and IBIG Futures in 2018 and is now planning to extend trading times to cover a 23-hour time period per weekday – from 6 pm ET on the prior day to 9.30 am ET on the current day – as of Q3 this year.

The extension comes alongside the launch of new options products based off of the underlying futures, due to be listed as of 10 July.

“We believe IBHY and IBIG options on futures will allow a wider array of futures market participants to use these products, including those unable to access securities-based options products, while extending trading to global hours for IBHY and IBIG futures will help investors in the US and abroad more efficiently manage positions around the clock,” said Arianne Adams, senior vice president and head of derivatives and global client services at Cboe Global Markets.

Set to be traded on Cboe Futures Exchange, LLC (CFE), the new options are on Cboe iBoxx iShares $ High Yield Corporate Bond Index futures (futures ticker: IBHY) and Cboe iBoxx iShares $ Investment Grade Corporate Bond Index futures (futures ticker: IBIG).

The new indexes claim to be the only exchange listed futures linked to US corporate bonds.

Both new IBYO and IBGO options will be physically settled and will trade electronically on CFE during regular trading hours.

According to CFE, for each product it may initially list for trading options on futures on up to four near-term serial months and four months on the March quarterly cycle. Both the options on futures and the underlying futures contract will expire on the same day and contracts will be cleared through OCC (regulated by the CFTC).

Cboe’s push in the derivatives market is not limited to the US. The exchange operator and infrastructure provider launched its Amsterdam-based market Cboe Europe Derivatives (CEDX) in September 2021 with backing from ABN Amro Clearing, Goldman Sachs and Morgan Stanley.

The plan for CEDX was to bring an on-screen market structure which closely resembled the US model to Europe. Through its pan-European model, CEDX works with the intention of giving all market participants the ability to trade a variety of single country and pan-European index futures and options through a single access point.

Since its launch, various steps have been taken to expand, including enhancing the team with hires such as Iouri Saroukhanov as head of European derivatives and the onboarding of new trading participants, such as Barak Capital Israel, Barak Capital Market Making B.V. and TTG Capital Limited, last November.

Additionally, in February this year, CEDX announced that it was expanding its product suite to include single stock options on leading European companies with the new products expected to be ready for trading by November 2023.