CBOE Holdings Inc.
), the holding company for Chicago Board Options Exchange (CBOE)
and S&P Dow Jones Indices, a subsidiary of
The McGraw-Hill Companies Inc.
), confirmed an extension of their licensing agreement.
Previously, the contract between CBOE and S&P Dow Jones was
scheduled to expire in 2022. With the amendment, the agreement
will now allow CBOE the exclusive rights to list security
options, computed and published by S&P Dow Jones Indices
through 2032 and the non-exclusive rights through 2033.
Following the amendment, CBOE can consistently trade in the
exchange's S&P 500 index options contract (SPX). SPX is the
most widely used U.S. index option with about 7 million contracts
CBOE's association with S&P Dow Jones dates back to 1983 when
S&P included CBOE in S&P 500 index options. This
partnership initiated the trend of using index options to access
the broader stock market through a single transaction. The
alliance has benefited both the companies over the years by
mutually complementing the other's operations.
For 30 years, the partnership has enabled CBOE to use its
Volatility Index (VIX) complex, which uses S&P 500 options
and also other S&P index options products for index
calculation. This has constantly improved the financials of CBOE
Holdings by contributing to its revenues. The extension of the
contract is expected to further augment CBOE scores and
facilitate its shareholders.
On the other hand through the liaison, CBOE allowed S&P Dow
Jones to license third parties to use CBOE's indexes, proprietary
index methodologies, related marks and data. As per the
agreement, CBOE also pays royalties on S&P 500 options and
CBOE VIX options to S&P Dow Jones Indices. The contract
extension is expected to bolster the revenue of S&P Dow Jones
by allowing CBOE to list more options on the stock market indices
using S&P index options products.
Another exchange company,
Nasdaq OMX Group Inc
) announced the merger of its Global Data Products and Global
Index businesses to form a new reporting segment - Global
Information Services in Jan 2013. The change will be implemented
retrospectively from the beginning of the year.
CBOE currently carries a Zacks Rank #3 (Hold). Among others from
NYSE Euronext Inc.
) carries a favorable Zacks Rank #2 (Buy) and is worth
CBOE HOLDINGS (CBOE): Free Stock Analysis
MCGRAW-HILL COS (MHP): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
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