Chicago Board Options Exchange (CBOE)

Founded in 1973, the Chicago Board Options Exchange (Cboe) is the oldest and largest options exchange in the U.S. and the first to trade listed options. It also now operates the largest stock exchange by value traded in Europe.[1]

In 2010, the exchange converted to a publicly traded corporation, Cboe Global Markets Inc., with its initial public offering ceremony held on its trading floor.[2]

The company is headquartered in Chicago and has offices in Kansas City, New York, San Francisco, London, Singapore, Hong Kong and Ecuador.[1]

In addition to options, Cboe offers trading in a wide range of financial assets and products, including futures, American and European equities, exchange-traded products, foreign exchange, multi-asset volatility products and Bitcoin.

VIX Index

Among Cboe's many products, the best known is the Cboe Volatility Index (VIX), which was created in 1993. According to the company, VIX "has become the world's barometer of equity market volatility."[2]

VIX futures began trading in 2004 and VIX options were launched in 2006. Trading in VIX futures expanded to 24 hours a day, every business day in 2014.

Other notable achievements in the company's history include the following:

  • In 1983, the company created options on the S&P 100 and S&P 500 indices.
  • The Options Institute, which educates investors about options, was formed in 1985.
  • Options on interest rates began trading in 1981, followed by options on sector and international indexes in 1992.
  • In 1994, the exchange began listing options on the Nasdaq 100 Index, and three years later it listed the first options on the Dow Jones Industrial Average.
  • The Cboe Futures Exchange opened in 2004.
  • In 2017, Cboe acquired Bats Global Markets, which made Cboe the second-largest stock exchange operator in the U.S. and one of the world's largest exchange companies. It also expanded Cboe's business into U.S. and European equities, exchange-traded funds and global forex.[2]

In addition to its flagship options exchange, Cboe has several other major business units, including:

  • Cboe ETF Marketplace.
  • ETF.com, a leading provider of news, data and analysis on exchange-traded products.
  • Cboe BXTR, which the company says is the largest European trade reporting facility.
  • Cboe Livevol, a leading provider of options technology, trading analytics and market data services.
  • Cboe Vest, an asset management company that specializes in target-outcome investing.
  • Cboe Risk Management Conferences, which sponsors financial industry forums on derivatives and volatility products.[1]

Bitcoin Futures

On 10 December 2017, the Cboe Futures Exchange became the first exchange to trade futures on Bitcoin, which the Wall Street Journal called "a milestone for the digital currency." Cboe beat its rival CME Group to the market by about a week.[3]

Bitcoin futures trade under the ticker symbol XBT. According to Cboe, Bitcoin futures bring "many benefits to traders, including transparency, efficient price discovery, deep liquidity and centralized clearing … in a highly regulated marketplace."[4]

Investors and traders can trade XBT futures "based on their view of Bitcoin prices, gain exposure to Bitcoin prices or hedge their existing Bitcoin positions" without actually taking possession of the digital currency. Traders can buy and sell Bitcoin futures "nearly 24 hours a day, five days per week."[4]

Bitcoin futures prices rose 24% on their first day of trading on the Cboe exchange.[5] More than US$75 million of Bitcoin futures were traded on that first day, "representing a modest but significant sum for derivatives on a digital currency whose underlying utility is still a matter of debate," according to the Financial Times.[6]

The Role Of Futures Trading In Bitcoin's Price Drop

Trading in Bitcoin futures has not been all smooth sailing. In fact, it may have contributed to the dramatic price decline in digital currencies in 2018.

According to an Economic Letter from the Federal Reserve Bank of San Francisco published on 7 May 2018, the sharp drop in Bitcoin prices since the peak in December 2017 may have a lot to do with the introduction of futures trading at the exact same time.

"The rapid run-up and subsequent fall in the price [of Bitcoin] after the introduction of futures does not appear to be a coincidence," the paper says. "Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset."[7]

The reason, the paper says, is that prior to the onset of futures trading, "it was extremely difficult, if not impossible, to bet on the decline in Bitcoin price. … This one-sided speculative demand came to an end when the futures for Bitcoin started trading. … With the introduction of Bitcoin futures, pessimists could bet on a Bitcoin price decline."[7]

In August 2018, the U.S. Securities and Exchange Commission nine applications for Bitcoin-based ETFs, arguing that the applications didn't provide sufficient protections to investors against fraud and market manipulation.

"The denial is a blow for exchange companies Cboe Global Markets and CME Group," the Wall Street Journal said, noting that "some of the ETFs that have been rejected would have invested in those [futures] contracts."[8]


Headquartered in Chicago and founded in 1973, the Chicago Board Options Exchange is the largest options exchange in the U.S. and the first to trade listed options. Its parent company is Cboe Global Markets Inc., which went public in 2010.

Cboe offers trading in a wide variety of financial assets and products, including options and futures, equities, ETFs, foreign exchange and digital currencies. One of its best-known products is the Cboe Volatility Index (VIX), which measures equity market volatility.


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