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Articles tagged by Volatility Quotes Options

CME Introduces “Triangulation” to Boost Options Liquidity CME Group has gone live with the “triangulation” of its volatility quoted FX options (VQO), a new system that links the VQO, premium quoted options (PQO) and futures books in order to boost liquidity. VQOs, which were launched on November 14, allow market participants to quote the standard 2:00pm expiration contracts in annualised volatility terms. When using a VQO, once a trade occurs the implied volatility input is converted into a USD premium using a standard options pricing model and the participants exchange a standard premium option and a delta hedge of standard underlying futures. This enables market participants to trade in volatility and clear in premium.