In June, Cboe made it official: the exchange group confirmed global trading hours (GTH) for VIX and SPX options, which would make the products tradable nearly 24 hours a day, 5 days a week. And now, it’s live.
(Note: All following times are in Eastern.)
Those first initiatives overlapped with London’s general trading hours, and now APAC gets to join the fray. (It is not irrelevant that Cboe purchased Chi-X APAC this year.)
With the above in mind, it is clear the exchange telegraphed this global trading move for some time. And it does not hurt that there has been a well-publicized explosion of interest in options data feeds and trading options since the start of the pandemic.
The diagram below provided by Cboe outlines the “new normal” 24-hour trading day:
The exchange points to three reasons for the expansion of GTH. For one, those futures and options data available in the past during extended hours have exhibited substantial volumes during periods of headline volatility. The Cboe notes that “VIX futures exceeded 117,000 contracts during GTH sessions between February 26, 2020, and March 6, 2020” and GTH sessions with 50,000+ VIX/SPX options data traded are not uncommon. The assumption herein is that even more time open will equate to more opportunities to trade such explosive risk events.
Cboe also cites price action in the overnight session, citing a study finding that “four hours during the trading day (outside of U.S. regular trading hours) accounted for the entire average market return.”
The third reason, of less importance to our readership but notable in a broader economic sense, is the fact that now the S&P 500 represents way more than just American industry: ~43% of sales by S&P 500 companies come from outside the United States.
With all the above context in mind, it is clear time zone bleed will be ongoing since exchanges have “all the time and in real-time, please” market mantras to keep up with.
As 24-hr SPX and VIX options trading evolve, SpiderRock will continue to capture and provide all options-related data for the instruments. For more information about SpiderRock’s real-time options data offering, please visit Real-Time Data Stocks, Options, & Futures – SpiderRock Platform or contact gwtsales@spiderrock.net.