Cboe Expands MXEA and MXCF With New Options Strategy Benchmarks

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.


Cboe Expands MSCI Indices With New Options Strategy Benchmarks

December 5, 2019

 MXEA and MXCFCboe Global Markets has launched a series of BuyWrite and PutWrite strategy benchmark indices based on the MSCI EAFE Index (MXEA) and MSCI Emerging Markets Index (MXEF) to help investors track the performance of investment strategies that use options or volatility products to help manage risk, reduce volatility and enhance yield. Cboe may develop up to 50 strategy benchmark and volatility indices over time for both MXEF and MXEA.

Further expanding Cboe’s MSCI index product suite, the new Cboe-MSCI BuyWrite and PutWrite indices are created for investors looking to replicate the same strategy on global equities featuring MXEA and MXEF options.

Bruce Traan, Head of Global Index Services at Cboe Global Markets, said: “Cboe’s popular strategy benchmark indices have proven to be valuable tools for market participants seeking to gain effective exposure to the global equity markets with less volatility and stronger risk-adjusted returns. As the industry leader in index options trading, we are pleased to broaden our MSCI-related offerings with these performance benchmark indices, and continue defining the markets with innovative products and trading solutions that meet the needs of investors.”

George Harrington, Global Head of Futures and Options Licensing at MSCI, commented: “We are delighted that Cboe has continued to leverage MSCI’s market-leading equity indices to expand their suite of strategy benchmark indices. Our expanded relationship reflects the increased demand for derivatives-based strategies and the widespread adoption and industry recognition of the MSCI Emerging Markets and EAFE Indices.”

The new Cboe-MSCI BuyWrite indices are designed to measure the performance of a hypothetical portfolio that buys the underlying stock index and writes covered calls on the MXEF and MXEA indices. The Cboe-MSCI PutWrite indices are designed to measure the performance of a hypothetical portfolio that sells an at-the-money (ATM) MXEF and MXEA put option against collateralized cash reserves held in a money market account.

The MSCI EAFE Index (MXEA) is recognized as the pre-eminent benchmark in the United States to measure international equity performance. It comprises the MSCI country indexes that represent developed markets outside of North America: Europe, Australasia and the Far East.

The MSCI EAFE Index is calculated in U.S. dollars on a real-time basis and disseminated every 60 seconds during market trading hours. The MSCI Emerging Markets Index (MXEF) captures large- and mid-cap representation across 23 Emerging Markets (EM) countries. With more than 800 constituents, the index covers approximately 85 percent of the free float-adjusted market capitalization in each country.

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