The NASDAQ Stock Market ("NASDAQ(r)") (Nasdaq:NDAQ) announced it has licensed the CBOE Futures Exchange(sm) (CFE(r)) to offer futures contracts based on the CBOE NASDAQ-100 Volatility Index(sm) (symbol VXNSM, futures symbol VN), which launched on Friday, July 6.John Jacobs, Executive Vice President for NASDAQ, said, "We are very pleased to partner with CFE in taking this important step forward for the financial markets. Volatility is an emerging new asset class and tools like the CBOE NASDAQ-100 Volatility Index are playing a vital role in spurring the growth and development of this space. With the introduction of these new futures contracts, investors, for the first time, now have the ability to trade the CBOE NASDAQ-100 Volatility Index."
Volatility is a measure of the fluctuation in the price performance of underlying stocks or stock indexes. Mathematically, volatility is the annualized standard deviation of returns. Typically, higher volatility signifies more uncertainty while lower volatility means less uncertainty. In 2007, the CBOE NASDAQ-100 Volatility Index has ranged in value between 14.83 and 24.61 and has recently been below the mid-point of its 2007 high-low range. The CBOE applies a similar measurement of option-derived volatility to the NASDAQ-100 Index that it applies to other leading U.S. stock market indexes, including those of Dow Jones, Standard & Poor's, and Russell. CBOE first introduced the CBOE NASDAQ-100 Volatility Index as a benchmark index in January 2001. For more information on how the CBOE NASDAQ-100 Volatility Index is calculated, as well as daily historical data, visit the CBOE's website at www.cboe.com/VXN.
NASDAQ Financial Products (NFP) is engaged in the design, development, calculation, licensing, and marketing of NASDAQ indexes. NFP specializes in the development of indexes focusing on NASDAQ's brand themes of innovation, technology, growth, and globalization. More than 500 financial products sold in 36 countries are based on NASDAQ indexes. NFP also provides custom index services and design solutions as a third-party provider to selected financial organizations.
NASDAQ is the largest U.S. equities exchange. With approximately 3,200 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks as well as a leading liquidity pool for trading NYSE-listed stocks. For more information about NASDAQ, visit the NASDAQ Web site at www.nasdaq.com
