MIAX Options is scheduled to launch volatility trading on the SPIKES Index (SPIKE) on 19 February. MIAX Options will list and trade cash-settled options on SPIKES, a measure of the expected 30-day volatility in the SPDR® S&P 500 ETF (SPY), the most actively-traded exchange traded fund in the world.
“For the first time in its history, the volatility trading market will be open to the full supply and demand pressures of the entire US market,” says Thomas P Gallagher (pictured), Chairman and CEO of MIAX Options. “But reaching this milestone is just the beginning of a long line of advancements we have planned for SPIKES and MIAX Options. We are excited to see this process unfold as a new entrant in the market and to position SPIKES to meet its full potential as a robust economic engine over time.”
Built on tight SPY option bid-ask spreads, SPIKES Index offers radically faster dissemination, publishing every 100 milliseconds as opposed to every 15 seconds. Its proprietary ‘price dragging’ technique minimises price distortions for traders in volatile and illiquid markets by insulating the index from erratic movements in the bid-ask spread of constituent options.
“Traders now have a choice, with an alternative that offers competitive pricing and a lower cost of execution. Our fees make volatility trading accessible to a much wider swathe of investors, and allow them to trade more frequently,” says Shelly Brown, Executive Vice President – Strategic Planning and Business Development of MIAX Options.
“The SPIKES settlement auction is highly transparent and accessible. Across all US options exchanges, participants can contribute prices and arbitrage mis-priced components, resulting in a more robust index settlement value – all designed to drive transparency and confidence.”
SPIKES was created by T3 Index, a research-driven financial indexing firm, as part of a partnership with MIAX Options’ parent holding company, Miami International Holdings (MIH).
“We see SPIKES as a market force with the ability to drive industry-wide growth through healthy competition, transforming the trading experience for investors,” said Simon Ho, CEO of T3 Index.