VIX Fear Gauge’s Only Competitor Set to Vanish From the Market

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The financial market’s biggest and most prominent measure of fear could soon see its only competitor disappear.

After a federal judge last month sided with Cboe Global Markets Inc., trading in Spikes futures is set to stop in November. The product, offered by a unit of the Miami International Holdings Inc., also known as MIAX, is the only competitor to the Chicago exchange’s Volatility Index.

Citadel Securities is among firms urging a path forward that ensures that Spikes futures can continue to trade, citing the benefits of increased competition and investor choice, according to people with knowledge of the firm’s thinking.Cboe started its VIX futures, a popular measure of expectations for volatility in the stock market, in the early 2000s. The product, widely known as the fear index, reigned solo until about four years ago, when a unit of MIAX decided to launch Spikes.

“They can correct any of the perceived deficiencies identified by the court to ensure the playing field remains even and level,” said Springer Harris, a portfolio manager at Teucrium. “We risk returning to a monopolized market, which could inadvertently limit choices which could increase costs.” “We firmly believe that Spikes futures provide the industry with a competitive choice for trading volatility that fosters innovation, lowers costs to retail and institutional investors, and mitigates single point-of-failure concerns for trading volatility products,” MIAX spokesman Andy Nybo said in a statement.

 

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