Market Turmoil Turns Nightmare for Volatility's Biggest Backer
- Cboe sees $4 billion in market value vanish during wild week
- Exchange says big swings are best advertising for its products
This article is for subscribers only.
Cboe Global Markets Inc. helped make the business of volatility famous, but investors have given the Chicago-based exchange about $4 billion of punishment because of it.
That’s how much value has been wiped off its market capitalization during one of the wildest weeks for markets in recent memory -- precisely the time you’d think the company would be thriving. But several funds tied to Cboe’s VIX index -- the core of its volatility franchise -- lost billions of dollars, prompting criticism of the risks they created and heightening speculation that traders will back off VIX products.