A major derivatives and securities exchange has announced its intention to introduce futures and options based on a new index named the Cboe Magnificent 10 Index, pending regulatory approval. This innovative product suite aims to provide investors with an efficient way to gain targeted exposure to a selection of highly traded AI technology stocks through cash-settled index futures and options.
The Cboe Magnificent 10 Index will serve as a thematic benchmark that is equally weighted, designed to reflect the performance of ten large-cap technology and growth-oriented companies listed in the U.S. Among the companies included in this index are notable names such as Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia, Tesla, Advanced Micro Devices (AMD), Broadcom, and Palantir.
The index’s value will be accessible via the Cboe Global Indices Feed through the Cboe Global Indices Channel, providing market participants with real-time insights. The exchange plans to offer futures and options trading for this index on an almost round-the-clock basis, catering to investors’ needs for managing risk and enhancing yield more effectively, particularly within the fast-evolving landscape of U.S. equities.
As an expert in derivatives noted, there is a growing demand among both institutional and retail traders for sophisticated options to gain exposure to significant market-moving stocks. This necessity also extends to having precise tools for position management and risk hedging, both intraday and continuously. The introduction of MGTEN Index futures and options is designed to meet this rising demand, offering an effective means to consolidate trading efforts into a simplified framework rather than managing multiple separate stock positions.
Distinctively, MGTEN options will be cash-settled and will feature a European-style structure, avoiding physical delivery and removal of the risk of early exercise. This sets them apart from options for the individual stock components. The offering will include standard monthly A.M.-settled expirations, alongside weekly P.M.-settled options that will allow expiry on each trading day. The popularity of short-dated options has surged, providing traders with unique opportunities for implementing daily strategies geared toward quick trading maneuvers.
MGTEN options will be able to facilitate trading on zero-days-to-expiry (0DTE), a practice that has gained traction as investors look to optimize tactical hedges and manage intraday risks. These options are expected to be available on the Cboe Exchange.
The introduction of cash-settled MGTEN futures will also become part of this product lineup, providing a capital-efficient mechanism to access exposure to top technology stocks via a single, tradeable instrument. This approach not only allows for portfolio diversification with built-in leverage but also offers the precision needed for hedging, speculation, or short positions.
Both the MGTEN Index futures and options will undergo clearance by the Options Clearing Corporation (OCC), which may facilitate margin offsets for traders making use of this dual approach.
The current plan targets a launch window for MGTEN Index monthly options and futures in the last quarter of 2025, with weekly P.M.-expiring options set to begin trading in the first quarter of 2026, all contingent upon regulatory approval. Initially, trading for these products will occur during standard trading hours, with plans for increased trading hours extending to global market periods in the future.
This introduction marks a significant step in providing advanced trading solutions tailored to the needs of market participants seeking exposure in a sector characterized by rapid growth and dynamic shifts.