It is hard to believe, but equity indexes (and futures and options based on them) became a commonly used investment tool only 25 or so years ago. As more and more investors began to apply indexes to their strategies, the demand grew for more indexed products. Exchanges and index providers obliged by creating hundreds of new ones, and thousands of variations on them. Nowadays, whenever an asset class or trading vehicle gains visibility and popularity, such as real estate or emissions trading, there are soon indexes ready to help measure and monitor them. In the case of volatility, it was Chicago Board Options Exchange that led the innovation initiative to first conceive the index and then convert it into a tradable instrument. In the index world, there seem to be more strategy indexes being developed, although occasionally there is a new asset class added to the mix.
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