CBOE Press Luncheon
Chicago
January 13, 2016
Edward Tilly, Chief Executive Officer
Edward Provost, President & Chief Operating Officer
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Forward-Looking Statements
This presentation may contain forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are those statements that reflect our
expectations, assumptions or projections about the future and involve a number of risks and uncertainties.
These statements are only predictions based on our current expectations and projections about future
events. We undertake no obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. There are important factors that could cause actual results,
level of activity, performance or achievements to differ materially from that expressed or implied by the
forward-looking statements, including: the loss of our right to exclusively list and trade certain index options
and futures products; increasing price competition in our industry; compliance with legal and regulatory
obligations and obligations under agreements with regulatory agencies; decreases in trading volumes or a
shift in the mix of products traded on our exchanges; our ability to accommodate trading volume and
transaction traffic, including significant increases, without failure or degradation of performance of our
systems; our ability to meet our compliance obligations, including managing potential conflicts between our
regulatory responsibilities and our for-profit status; the accuracy of our estimates and expectations;
legislative or regulatory changes; increasing competition by foreign and domestic entities; our index
providers’ ability to perform under our agreements; our ability to operate our business without violating the
intellectual property rights of others and the costs associated with protecting our intellectual property rights;
our ability to maintain access fee revenues; our ability to protect our systems and communication networks
from security risks, including cyber-attacks; economic, political and market conditions; our ability to attract
and retain skilled management and other personnel; our ability to manage our growth effectively; our
dependence on third party service providers; and the ability of our compliance and risk management
methods to effectively monitor and manage our risks.
More detailed information about factors that may affect our performance may be found in our filings with the
U.S. Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended
December 31, 2014 and other filings made from time to time with the SEC.
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Agenda
Introductions
CBOE’s Growth Story – Moving It Forward Into 2016
Q&A
Create
Growing index
product line
through product
innovation,
partnering with
major global
index providers
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Collaborate
Forming
partnerships to
develop new
products and
markets
Connect
Connecting with
customers to
expand our
global reach
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Extending Global Reach of Products, Education
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Create
Growing index product line through
product innovation, partnering with
major global index providers
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Create: Growing Index Product Line
S&P 500 Index (SPX) options, the most actively traded
U.S. index options
Continued growth in 2015 even after
more than 30 years of trading
SPX ADV up 6% year over year
Third consecutive year of record volume
SPX remains the preferred contract
for large institutional investors
SPX Weeklys ADV up 24% year over year
Tenth consecutive year of record volume
SPX Weeklys attract more retail/noninstitutional investors than traditional
SPX, although the user base is made up
of both
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*Includes SPX Weeklys
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Create: Growing Index Product Line
CBOE Volatility Index (VIX) futures and options anchor
suite of volatility products
Most of 2015 was marked by historical
levels of low volatility punctuated by
volatility spikes in 3Q
Both VIX futures and options posted
record volume in 3Q
VIX futures ADV was up 2% year over
year in 2015, a sixth consecutive record
VIX options ADV was down 9% from
last year’s record ADV
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Create: Growing Index Product Line
VIX Weeklys options and futures, which more closely track the
spot index, provide investors with additional opportunities to
trade volatility
Launched in October, VIX Weeklys
options averaged nearly 35,000
contracts per day in 2015
Hit a daily high of more than 126,000
contracts on December 22
Launched in July, VIX Weeklys
futures averaged about 300
contracts per day in 2015
Hit volume spikes of nearly 2,000
contracts per day on August 20 and 21
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Create: Growing Index Product Line
CBOE became sole U.S. provider of key FTSE Russell Index
products in 2015
Russell 2000 Index (RUT) options
exclusively listed in April
Launched Russell 1000, 1000 Value,
1000 Growth indexes in October
2016: Preparing to launch FTSE 100
and FTSE China 50 indexes in 1Q
2016: Continue to roll out new
products and expand our FTSE
Russell marketplace
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Source: OCC and CBOE
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Collaborate
Forming partnerships to develop
new products and markets
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Collaborate: Develop New Products and Markets
Teamed with London Stock Exchange Group (LSEG) and
major dealer banks to form CurveGlobal, a new interest rate
derivatives platform
Products will trade on the London Stock Exchange Derivatives
Market and clear through LCH.Clearnet
Offers futures based on major European interest rates
Expected to provide more product choices, increased trading
efficiencies and reduced transaction costs
CBOE plans to introduce CurveGlobal to our U.S. customer
base and develop products suited to the platform
2016: 2Q launch planned
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Collaborate: Develop New Products and Markets
Teamed with Environmental Financial Products (EFP) to
launch American Financial Exchange (AFX), an interbank
lending exchange
AFX is an electronic marketplace for small and mid-sized banks to
lend and borrow short-term funds, with a focus on 1,740 regional
and community banks with a combined $4.7 trillion in assets
CBOE hosts and operates the AFX trading platform and also
supports surveillance and membership services
Total value of $255 million transacted since first day of trading on
December 11 (through January 7)
2016: AFX plans to launch a new transaction-based interest rate
benchmark, Ameribor
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Connect
Connecting with customers to
expand our global reach
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Connect: Expanding Access to CBOE
CBOE launched extended trading hours (ETH) in key products
to meet demand from a growing global customer base
VIX futures now trade nearly 24 hours
Nearly 9% of VIX futures trade during non-U.S. hours
Key Dates
• January 2014: U.S. Federal Reserve
begins “tapering.”
• August 2014: Geopolitical worries
weigh on the markets: VIX Index up
sharply.
• October 2014: Fed announces it will
end its bond-buying program.
• July 2015: Shanghai Composite
Index slides 5.9%; trading in 1,331
companies halted.
• August 2015: Dow down more than
1,000 points at August 24 opening.
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Connect: Expanding Access to CBOE
Extended trading hours for VIX, SPX options launched in March
Overnight trading a first in the
options space
Six-hour session begins at
2:00 a.m. CT, aligning with open
of trading in London and close
in Asia
2016: Plan to extend trading
hours in additional products
when we see an opportunity
¹Includes SPXPM
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Connect: Reaching Investors
Expanding investor education around the world
Annual CBOE Risk Management Conference (RMC)
Record number of attendees at RMC U.S. and RMC Europe in 2015
Introduced first RMC Asia in 2015
The Options Institute
Conducted 400 seminars in 2015, reached approximately 40,000 investors
Launched the first extension of CBOE’s Options Institute with Singapore
Exchange (SGX) in December
2016: RMC U.S. to be held in Florida; RMC Europe in Ireland; RMC
Asia to be announced
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Connect: Promoting Long-term Use of
CBOE Products
Four New White Papers on CBOE Strategy Benchmark Indexes
SPX-based Options Writing Benchmarks by Keith Black (CAIA), Ed Szado
(Providence College)
Benchmarks: BXM, BXMD, BFLY, CMBO, CNDR, PUT
VIX-based Benchmark Indexes by Merav Ozair (NYU)
Benchmarks: VPD, VPN, VXTH, LOVOL, VSTG
Russell-based Benchmark Indexes by Mark Shore (DePaul)
Benchmarks: BXR, BXRC, BXRD, CLLR, PUTR, WPTR
Put-writing Benchmark Indexes by Oleg Bondarenko (UIC)
Benchmarks: PUT, WPUT
Additional details available at www.cboe.com/benchmarks
Investors want strong long-term returns
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Investors want higher yields
Investors want market capacity
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Connect: Enhancing Customers’
Trading Experience
CBOE completed the acquisition of the market data services
and trading analytics platforms of Livevol, Inc. in August
Livevol is a leading provider of equity and index options
technology and market data services for professional, retail
traders
Livevol’s trade analysis and volatility modeling technologies
are a natural fit with CBOE’s trade support services
Livevol’s options strategy backtester, used by Fidelity and
other platforms, is a feature in CBOE Livevol Pro and CBOE
Livevol X
2016: Plan to integrate SPX and VIX futures into Livevol’s
analytics to support CBOE index and volatility trading
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Connect: Through Trading Technology
CBOE Vector -- our next-generation trade engine technology
SPEED. Technology designed to be an industry leader in terms of
latency: Orders expected to take less than 25 microseconds roundtrip;
improved connectivity lowers variability in response time
CUSTOM-BUILT. In-house design and development taps CBOE’s
experienced knowledge base, supplemented by external hires of top
developers in the trading space
AGILITY. State-of-the-art system will employ the latest hardware and
software technology, making it easier to manage, use and run, while at
the same time enhancing risk controls
ROLLOUT. Vector is expected to be up and running in 3Q 2016 on
CBOE’s Futures Exchange. Development of Vector for CBOE and C2
options to follow
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Q&A
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Notes
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CBOE
400 South LaSalle Street
Chicago, Illinois 60605
www.cboe.com
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