Cboe Global Markets, Inc, the world’s leading derivatives and securities exchange network, marked the 20^th anniversary of Cboe Futures Exchange (CFE) and the trading of Cboe Volatility Index (VIX) futures. CFE was launched to provide a liquid and transparent on-exchange volatility futures offering, with VIX futures being the first product listed in 2004.

On March 26, 2004, CFE successfully opened for trading, with 449 VIX futures contracts trading on the all-electronic exchange. Based on the VIX Index, which has served as a premier gauge for U.S. equity market sentiment since its launch in 1993, VIX futures are among the most actively traded exchange-listed volatility futures in the world, with total volumes reaching 53.7 million contracts in 2023. VIX futures, and the addition of VIX options in 2006, were a pivotal first step in making volatility a tradable asset class, breaking down access barriers for investors and paving the way for the development of a comprehensive ecosystem including additional futures, options and other exchange-traded products (ETPs) utilizing these derivatives.

“Cboe has been a pioneer in the volatility space and helped establish volatility as a tradeable asset class with the launch of VIX futures in 2004, and 20 years later, we remain steadfast in our approach to developing sophisticated strategies into exchange-listed futures,” said Laura Fuson, Vice President and Head of Futures at Cboe Global Markets. “Cboe Futures Exchange offers participants access to liquid and transparent risk management solutions and the ability to trade volatility around major market events, such as economic data or elections. By continuing to work with our partners and clients, we aim to build upon Cboe’s rich history of innovation and help provide investors the tools they seek to better manage their portfolios.”

VIX futures reflect the market’s estimate of the value of the VIX Index on various expiration dates in the future and can provide market participants with a variety of opportunities to implement their view of U.S. equity market volatility using risk management, alpha generation and portfolio diversification trading strategies. The VIX Index is designed to measure 30-day expected volatility of the U.S. stock market using S&P 500 Index options. Through Cboe’s global trading hours session, VIX futures are available to investors around the world nearly 24 hours a day, five days a week.

Today, two decades after its launch, CFE continues to break down access barriers and bring complex trades to the exchange-listed, centrally cleared environment.  CFE has expanded beyond traditional VIX futures and now offers weekly expirations for VIX futures, a smaller VIX futures contract size designed to be more accessible, and transparent and efficient risk management solutions for fixed income markets through U.S. corporate bond index futures and options on those futures.

Along with Cboe Labs, Cboe’s in-house innovation arm, CFE is exploring additional product offerings including new S&P 500 Variance Futures and futures tied to the Cboe S&P 500 Dispersion Index (DSPX), both subject to regulatory review. Cboe’s S&P 500 Variance futures are expected to be cash-settled contracts based on the realized variance of the S&P 500 Index and their design is expected to leverage market feedback from Cboe’s previous variance futures offerings. DSPX futures could potentially help investors manage their exposure to the S&P 500 Index and express expected dispersion views. Both products aim to transform complex trades into accessible, exchange-listed offerings.

Source: Cboe