Trading volume on the CBOE Futures Exchange jumped 251% last month to a record 183,173 contracts from 51,871 contracts in August 2006, the CFE said Tuesday.
The CFE is an all-electronic subsidiary of the Chicago Board Options Exchange, the largest U.S. options market, and is the home of CBOE's suite of volatility and variance futures products.
For the third straight month, CFE said futures trading set a record as August's volume surpassed the 121,285 contracts traded in July, the previous all-time high.
Volatility as its own asset class is gaining significance with investors, said Andrew Lowenthal, managing director of CBOE Futures Exchange, in a statement.
"Increasingly, investors are finding a variety of uses for volatility futures - from taking a view on the direction of market volatility, to hedging volatility risk, to diversifying a portfolio," he said.
Average daily volume last month stood at a record 7,964 contracts, far outpacing the year-ago average daily volume of 2,271 contracts, CFE said.
Total CFE volume was 661,456 contracts traded for the first eight months of 2007, up 38% from 2006's year-to-date volume of 478,424 contracts. Open interest stood at 70,334 contracts at the end of August, up 47% from August 2006.
Futures volume on the CBOE Volatility Index, a barometer of investor fear, last month set an all-time high of 163,079 contracts, a gain of 46% from July's record volume of 111,814 contracts.
Average daily volume in VIX futures in August was a record 7,090 contracts, while at month's end, open interest stood at 63,995 contracts, 41% ahead of last August.
CFE offers futures on seven different contracts, including: the CBOE Volatility Index, CBOE DJIA Volatility Index, CBOE Nasdaq-100 Volatility Index, CBOE Russell 2000 Volatility Index, CBOE S&P 500 3-Month and 12-Month Variance, respectively and the CBOE S&P 500 BuyWrite Index.