KUALA LUMPUR: Affin Hwang Investment Bank Bhd (Affin Hwang IB), the investment banking arm of Affin Bank Bhd
, has launched access to Cboe Volatility Index (VIX) Futures, giving its clientele a tool to hedge against volatility, particularly in the US equity market.
The VIX Index – often referred to as Wall Street’s “fear gauge” – measures expected volatility in the S&P 500 Index over the next 30 days.
The S&P 500 Index tracks 500 of the largest publicly traded companies in the United States. While the VIX Index itself is derived from S&P 500 option prices traded on the Chicago Board Options Exchange, VIX Futures contracts are listed and traded on the Cboe Futures Exchange (CFE).
The launch formalises Affin Hwang IB’s partnership with Cboe Global Markets Inc, which, among others, operates the Chicago Board Options Exchange, the largest US equity options exchange, and oversees the CFE.
Additionally, Affin Hwang IB chief executive officer Hanif Ghulam Mohammed said the collaboration reflects growing interest in volatility-based products, as investors look for alternative ways to manage portfolio risk.
He said the introduction of VIX Futures comes at a “timely” moment, as equity markets face frequent volatility driven by macroeconomic, earnings and geopolitical developments. “We are seeing a lot more volatility in the equity markets, and now investors have an option to hedge their portfolios against that volatility,” he, who assumed his role on Sept 9 last year, said at the launch event yesterday.
Historically, the VIX tends to move inversely to US equities, rising when American stocks fall and easing when markets rally, making it a natural hedge.
In simple terms, a higher VIX reading signals greater uncertainty in US markets, while a lower reading suggests more stable conditions.
For context, year-to-date, the S&P 500 Index has gained about 1.28%, while the VIX Index fell 1.7% to 14.49 points.
Furthermore, Hanif said this shift towards volatility-based instruments reflects a broader evolution in how portfolios are managed.
“We no longer just have to use directional products – buying and selling equities – to trade,” he said.
“Volatility is an essential component of modern risk management, and VIX is a perfect instrument to allow investors to hedge their portfolios.”
Hanif said the introduction of VIX Futures represents a move into volatility-driven instruments, with more such products, including options on volatility, planned in the pipeline.
“This is about giving investors different alternatives to manage their portfolios, optimise returns and secure those returns for the future,” Hanif added.
While volatility products are relatively new in Malaysia, Hanif noted that demand is well established globally.
Cboe Global Markets head of Asia Pacific derivatives sales Sharon Ang said the VIX Index has become the global benchmark for measuring market sentiment and risk since its introduction in 1993, with VIX Futures launched in 2004.
“In today’s environment, where markets can swing sharply on macro events or geopolitical developments, having a tool to hedge tail risk and diversify portfolios is critical,” she said.
She said VIX Futures are actively traded worldwide, with average daily volumes of about 200,000 contracts in 2025 on the CFE.
Speaking to StarBiz, she said each VIX Futures contract has a multiplier of US$1,000, translating to a notional value of roughly US$15,000 per contract today, depending on the VIX Index level.
“Volatility is often seen as uncertainty, but we view it as an opportunity,” Ang said, adding that VIX Futures also support “event-driven strategies around key market dates.”
For Affin, Hanif said the launch is not just about product expansion but also client growth.
“This is more than a campaign – it is a catalyst,” Hanif said.
“Our objective is to expand our client base, bring in new-to-bank and new-to-product investors, and deepen relationships by cross-selling volatility solutions across futures and equities.”
