Cboe Global Markets has expanded its collaboration with FTSE Russell to drive product innovation in the digital assets space, potentially beginning with cash-settled index options tied to the FTSE Bitcoin Index and the FTSE Ethereum Index.
Catherine Clay, Global Head of Derivatives at Cboe, said that for many years, Cboe and FTSE Russell have worked together to offer index options based on FTSE Russell indices.
“Our expanded relationship mirrors that successful model of collaboration, combining Cboe’s unrivalled derivatives expertise with FTSE’s world-class indexing capabilities to potentially bring new solutions to the digital assets space,” she said.
“Derivatives has long been an area where Cboe excels, and now we are strategically expanding our expertise into the digital assets space. As these two asset classes converge, we look forward to driving continued innovation and our relationship with FTSE Russell will be key to this strategy,” she added.
Cboe’s plans to list cash-settled index options on FTSE’s indices, subject to regulatory approvals, would help meet growing investor demand for exchange-traded derivatives to gain and manage crypto exposures in a trusted, transparent and U.S.-regulated trading environment.
The FTSE Bitcoin Index and FTSE Ethereum Index are part of the FTSE Digital Asset Indices Series, which is developed in partnership with Digital Asset Research (DAR).
These indices are designed to capture the performance of bitcoin and ether, as determined by the FTSE DAR Reference Price, and provide institutional-quality, liquidity-screened exposure to the digital asset market.
Commenting on the expanded collaboration, Fiona Bassett, CEO of FTSE Russell, said: “We are delighted to continue working alongside Cboe Global Markets, realizing our mutual commitment to enable new asset innovation in financial markets. Our indices are used by some of the largest crypto asset managers in the world for their best-in-class data and processes built to manage regulatory and trading risk – critical differentiators for the data in this asset class.”
Cboe’s expanded collaboration with FTSE Russell follows the recent realignment of its digital assets business – a move that will consolidate all Cboe U.S. futures products, including digital asset futures, onto one exchange, subject to regulatory review, powered by Cboe’s broader global derivatives franchise and technology platform.
Furthermore, the collaboration is expected to introduce new products that will complement Cboe’s existing digital assets initiatives.
These currently include the listing and trading of cash-settled bitcoin and ether margin futures, along with spot bitcoin ETFs, where Cboe BZX Equities Exchange lists six out of the 11 ETFs listed domestically.
Additionally, Cboe submitted five of the eight recently SEC-approved rule filings to list ETFs tied to the price of ether.
Cboe intends to share more details about its plans for cash-settled index options on the FTSE Bitcoin Index and the FTSE Ethereum Index potentially later this year.
“Our plans to develop bitcoin and ether index options come at an exciting time as more investors of all types enter the crypto markets and are increasingly seeking exchange-listed derivatives to manage their crypto exposures,” commented Rob Hocking, Head of Product Innovation at Cboe.
“Many of our customers are already trading Cboe-listed digital asset products, whether margin futures or ETFs, tied to bitcoin and ether. The launch of cash-settled index options will be additive – resulting in a more comprehensive product suite and helping to foster greater liquidity and hedging opportunities in these markets,” he said.
“We believe that derivatives will drive the next phase of the digital asset market’s maturation, and we’re excited about the potential benefits that cash-settled index options can bring to the space,” he added.
