Feb. 8, 2015
A product like this is long overdue, and I'm excited at the prospect of being able to trade pure market realized volatility. The usefulness of options contracts that settle to realized volatility cannot be overemphasized. In the over-the-counter markets, millions of dollars of notional variance and volatility swaps trade daily, and these products always settle to actual market volatility. These options will be extremely helpful for hedging index option exposure, equity portfolios, and as a risk-management tool for hedge fund managers.