* VIX futures trading hours to increase in two stages
* Start of first phase delayed from late September
* Second phase to start Oct. 28
By Tom Polansek and Doris Frankel
CHICAGO, Sept 30 (Reuters) - CBOE Holdings Inc saidon Monday it has delayed the launch of expanded trading hoursfor futures on the CBOE Volatility Index for a second time,setting Oct. 21 as the new target start date.
CBOE, operator of the CBOE Futures Exchange and ChicagoBoard Options Exchange, said in July that the extension wouldbegin in late September.
A CBOE spokeswoman had no immediate further comment on thedelay.
The exchange operator is aiming to increase overseas tradingof its lucrative CBOE Volatility Index by adding fivehours and 45 minutes to the trading day in two stages. Thebiggest chunk of extra time will come during European tradinghours.
The index, also known as the VIX, is a widely followed gaugethat measures investors' sentiment.
The first phase of the extension will add a 45-minutepost-settlement trading period to the current trading hours of7:00 a.m. CT (1200 GMT) to 3:15 p.m CT (2015 GMT). Following theclose of trading Monday to Thursday, the market will reopen fora new trading period from 3:30 p.m. CT (2030 GMT) to 4:15 p.m.CT (2115 GMT). Trading will then resume at 7:00 a.m. CT thefollowing morning.
The second round of changes will begin on Oct. 28, CBOEsaid.
It will allow European-based customers to trade VIX futuresduring their local trading hours by beginning the currenttrading session at 2:00 a.m. CT Monday to Friday, instead of thecurrent opening time of 7:00 a.m. CT.
"We are pleased to provide our European customers with theopportunity to trade VIX futures during local trading hours, butwe also believe our entire global base of VIX users will benefitby extended trading hours," CBOE Holdings Chief ExecutiveOfficer Edward Tilly said in a statement.
CBOE in February opened a communications hub outside ofLondon to facilitate VIX futures trading.
CBOE had initially planned to start extending the tradingday in May. However, it delayed the increase after a half-dayoutage at the Chicago Board Options Exchange in April exposedsoftware problems.
Exchanges, including CBOE, have since become more cautiousabout rolling out product offerings, changing market structureand adding trading hours because of a Nasdaq OMX Group outage last month, said Chris Allen, equity analyst for EvercorePartners.
Following the three-hour Nasdaq disruption, U.S. Securitiesand Exchange Commission Chair Mary Jo White met privately withtop executives of the major exchanges, including CBOE executivechairman William Brodsky, to discuss market reforms.
"The SEC is very on top of all of the exchanges right now,"Allen said.
CBOE shares were down 0.1 percent at 45.23.
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