CBOE launches S&P 500 ESG Index Options

Market participants, globally, are pursuing a sustainable investing agenda, says CBOE chairman Ed Tilly.

Stock exchange holding company CBOE Global Markets is to list options on the S&P 500 ESG Index, as part of plans to expand its suite of products tied to S&P Dow Jones Indices.

Subject to regulatory review, the new options are scheduled for launch on 21 September 2020.

The company hopes they will appeal to traders seeking a way to gain exposure to, or hedge the US equity market, while meeting sustainability criteria.

The CBOE S&P 500 ESG Index options will offer a representation of companies that meet S&P DJI’s ESG factors but with a risk/return profile that is similar to the S&P 500, the company said in an announcement on Thursday (27 August).

Ed Tilly, chairman, president and chief executive officer at CBOE Global Markets explained that the launch was in recognition that many market participants around the world are increasingly pursuing a sustainable investing agenda, aligned with their own ESG preferences.

He added: “The new CBOE S&P 500 ESG Index options are designed to respond to this growing demand from the marketplace by offering an additional tool that can provide global participants of all sizes with ESG representation within their portfolios, while enabling them to efficiently trade and manage their risk preferences.”

In its announcement, CBOE said it hoped the launch would move “ESG from the fringe of market participants’ portfolios, to the core.”

The new contracts, will complement CBOE’s suite of S&P DJI Index options, which include S&P 500 Index options, in standard and mini, one-tenth contract size, with AM and PM settled, weekly and monthly expiring contracts.