Cboe Global Markets, Inc., a leading global markets operator and pioneer in equity and index derivatives, announced the launch of mini-Russell 2000 Index (MRUT) binary options (ticker: MRTBW). The binary options based on MRUT, which is 1/10^th the size of the Russell 2000 Index, began trading on November 9 and are the latest addition to Cboe’s prediction market suite.

MRTBW are yes or no directional trades that pay $100 or $0, depending on whether the MRUT settles at, above or below the specified level. For example, an investor who makes a trade that MRUT will close above 280 will receive $100 at settlement if it closes at 280 or above, while the contract will pay $0 if the index closes below 280. Cboe will list P.M.-settled contracts expiring on the same and next trading day, and MRTBW options offerings are centrally cleared through the Options Clearing Corporation (OCC).

“Small-cap stocks are closely watched by retail investors and can play an important role in a portfolio, and Cboe’s new MRUT binary options allow investors to make yes-or-no trades on a leading small-cap index,” said JJ Kinahan, Head of Retail Expansion and Alternative Investment Products at Cboe. “The Russell 2000 Index is traditionally more volatile than other broad measures, which is part of why demand for zero-days-to-expiry options tied to the index has grown significantly in recent years. As interest in short-dated exposure grows, Cboe continues to expand its SEC-regulated prediction markets offerings and provide investors with the ability to trade and learn more about market outcomes within the safeguards of the securities markets.”

“The Russell 2000 Index is the leading benchmark for the U.S. small-cap equity market, providing investors with a trusted and objective measure of this important market,” said Shawn Creighton, Director of Index Derivatives Solutions at FTSE Russell. “Our longstanding partnership with Cboe has been instrumental in expanding access to innovative index-based products, and this latest development builds on that relationship by giving investors more ways to access U.S. small caps and manage risk.”

The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity market. The index includes approximately 2,000 of the smallest companies based on a combination of their market capitalization and current index membership. The Russell 2000 Index is a subset of the Russell 3000 Index, which is designed to represent approximately 98% of the investible U.S. equity market. Cboe has seen record demand in its traditional Russell 2000 Index (RUT) options suite, with average daily volume of 85 thousand contracts through the first three quarters.

With the launch of MRUT binary options, Cboe’s prediction markets suite now includes the ability to trade outcomes tied to small-cap and large-cap (S&P 500 Index) equities and will soon include certain SEC-regulated corporate earnings metrics. Cboe’s prediction markets offerings are available through select retail brokers and leverage the protections of the U.S. registered securities trading environment.

To learn more about Cboe’s offerings, visit Cboe Prediction Markets.

Source: Cboe Global Markets