BlackRock, Cboe team up on new bond futures contract – Finance News

on May17

16 May 2018 | 6:36 pm

Chicago exchange company Cboe Global Markets is teaming up with the world’s largest asset manager, BlackRock, to create a suite of tradeable corporate bond index products, which the firms are touting as the first of their kind.

Cboe, which operates options and futures exchanges, said in a statement today that it will work with New York-based BlackRock to design exchange-listed futures contracts that “reflect the performance of the broad U.S. high yield and investment grade bond markets.” The partners, also including IHS Markit, expect institutional investors to use the new contracts to hedge their investments in U.S. corporate debt.

They have applied with the Commodity Futures Exchange Commission for approval of trading in the new contracts and expect them to enter the market this summer, starting with high-yield corporate bond index futures.

“We believe this will provide our customers with a tool to mitigate credit risk in the corporate bond market,” Cboe President Chris Concannon said in the statement.

Exchanges attempt to create new products regularly, but very few successfully lure traders to the untested contracts. Cboe 25 years ago developed a major success with its suite of contracts tied to its proprietary Volatility Index, or VIX “fear gauge,” though trading in those products has come under investor and regulatory scrutiny recently.



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