CME Launches Gold VIX Options

Tyler Durden's picture

The just reported death of three muni ETFs means that the ever creative developers of synthetic stock CDOs and other volatility indices have to think of even more creative ways to get retail to put their money into guaranteed profit products. Sure enough, the CME Group has just come up with one such product: the Gold Volatility Index Options (GVP) Contracts. From the press release: "Effective trade date Jan. 24, 2011, the Exchange will list a Gold Volatility Index (VIX) Options (GVP) contract for trading on CME Globex and for clearing through CME ClearPort. The Gold Volatility Index will be a 60-day forward looking index value on option implied volatility. Please note that fees will be waived through Jun. 30, 2011." Which means naturally that the CME is anticipating the ongoing spike in gold vol to persist. But if one were to listen to the ethically pristine gentlemen from the CFTC this morning, one would be left with the impression that there is no volatility in the gold space, and it is all in the eyes of the speculative beholders.

More details from the CME:

And just to show that there is no need to worry about any specultive fervor in the commodity space, the CME also noted that the recently launched E-micro Gold Futures Open Interest has hit new highs: "E-micro gold futures achieved a record open interest of 803 contracts on Jan. 7, 2011. This tops the previous record of 769 contracts reached on Dec. 29, 2010."