Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.
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The Chicago Board Options Exchange (CBOE), is now known as CBOE Global Markets, and it is one of the world’s largest exchanges for trading options contracts, a type of derivative.
Like other global trading companies, CBOE is poised to offer extended trading hours in 2026.
CBOE also operates a range of exchanges and trading platforms for various securities (e.g., equities, futures, digital assets). The CBOE also originated one of the most popular volatility indices in the world, the VIX, a.k.a. the fear index.
While you may already be familiar with the New York Stock Exchange and Nasdaq, those are only two of the exchanges investors use to trade securities. Here’s where the CBOE fits in.
Key Points
• The Chicago Board Options Exchange (CBOE), now CBOE Global Markets, is the world’s largest exchange for trading options contracts and other derivatives.
• CBOE operates a variety of exchanges and trading platforms for different securities, including equities, futures, and digital assets.
• The organization originated the CBOE Volatility Index (VIX), which is one of the most popular volatility indices, also known as the “fear index.”
• Options contracts traded on CBOE are financial derivatives that derive their value from an underlying asset.
• CBOE has a history of innovating tradable products, and plans to offer extended trading hours of almost 24 hours per day, five days a week, starting in 2026.
What Is the CBOE Options Exchange?
CBOE, or CBOE Global Markets, Inc., is a global exchange operator founded in 1973 and headquartered in Chicago. Investors may turn to CBOE to buy and sell both derivatives and equities. In addition, the holding company facilitates trading various securities across an array of exchanges and trading platforms.
What Does CBOE Stand For?
Originally known as the Chicago Board Options Exchange, the organization incorporated as a holding company in 2010, making the options exchange its core asset. The company changed its name to CBOE Global Markets in 2017.
The organization also includes several subsidiaries, such as The Options Institute (an educational resource), Hanweck Associates LLC (a real-time analytics company), and The Options Clearing Corporation or OCC (a central clearinghouse for listed options).
The group has global branches in Canada, England, the Netherlands, Hong Kong, Singapore, Australia, Japan, and the Philippines.
CBOE is also a public company with its stock (CBOE) traded on the CBOE exchange, which investors can find when they buy stocks online.
What Are Options Contracts?
Options are considered derivative investments, as they derive their value from underlying assets. Each option is a contract that can be bought and sold on an exchange (similar to the underlying assets they’re associated with). One option contract generally represents 100 shares of the underlying stock or other security.
Because investors trade option contracts, not the underlying security itself, buying or selling an options contract may enable investors to benefit from price changes in the underlying asset without actually owning it. But trading options is a complex endeavor.
First, an options contract generally costs less than the underlying asset, so trading options can offer investors leverage that may result in potentially amplified gains, depending on how the market moves — or amplified losses. For this reason, options are considered high-risk investments and they’re typically suited to experienced investors.
Recommended: A Beginner’s Guide to Options Trading
History of the Chicago Board of Options Exchange
Founded in 1973, CBOE represented the first U.S. market for traders who want to buy and sell exchange-listed options, in addition to investing in stocks. This was a significant step for the options market, helping it become what it is today.
In 1975, the CBOE introduced automated price reporting and trading along with the Options Clearing Corporation (OCC).
Other developments followed in the market as well. For example, CBOE added put options in 1977. And by 1983, the market began creating options on broad-based indices using the S&P 100 (OEX) and the S&P 500 (SPX).
How the CBOE Evolved
In 1993, CBOE created its own market volatility index called the CBOE Volatility Index (VIX).
In 2015, it formed The Options Institute. With this, CBOE had an educational branch to provide investors with information about options. The Options Institute schedules monthly classes and events to help with outreach, and it offers online tools such as an options calculator and a trade maximizer.
From 1990 on, CBOE began creating unique trading products. Notable innovations include LEAPS (Long-Term Equity Anticipation Securities) launched in 1990; Flexible Exchange (FLEX) options in 1993; week-long options contracts known as Weeklys in 2005; and an electronic S&P options contract called SPXPM in 2011.
Understanding What the CBOE Options Exchange Does
The CBOE Options Exchange serves as a trading platform, similar to the New York Stock Exchange (NYSE) or Nasdaq. It has a history of creating its own tradable products, including options contracts, futures, and more. CBOE also has acquired market models or created new markets in the past, such as the first pan-European multilateral trading facility (MTF) and the institutional foreign exchange (FX) market.
The CBOE’s specialization in options is essential, but it’s also complicated. Options contracts don’t work the same as stocks or exchange-traded funds (ETFs). They’re financial derivatives tied to an underlying asset, like a stock, but they have a set expiration date dictating when investors must settle or exercise the contract. That’s where the OCC comes in.
The OCC settles these financial trades by taking the place of a guarantor. Essentially, as a clearinghouse, the OCC acts as an intermediary for buyers and sellers. It functions based on foundational risk management and clears transactions. Under the Security and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), it provides clearing and settlement services for various trading options. It also acts in a central counterparty capacity for securities lending transactions.
Recommended: An Introduction to Stock Options
CBOE Products
CBOE offers a variety of tradable products across multiple markets, including many that it created.
For example, CBOE offers a range of put and call options on thousands of publicly traded stocks, ETFs, and exchange-traded notes (ETNs). Investors may use these tradable products for specific strategies, like hedging. Or, they might use them to gain income by selling cash-secured puts or covered calls.
These options strategies give investors flexibility in terms of how much added yield they want and gives them the ability to adjust their stock exposures.
Investors have the CBOE options marketplace and other alternative venues, including the electronic communication network (ECN), the FX market, and the MTF.
CBOE and Volatility
The CBOE’s Volatility Index (VIX), sometimes called the fear index, is a gauge of market volatility in U.S. equities. It also tracks the metric on a global scale and for the S&P 500. That opens up an opportunity for many traders. Traders, both international and global, use the VIX Index to get a foothold in the large U.S. market or global equities, whether it’s trading or simply exposing themselves to it.
In late 2021, CBOE Global Markets extended global trading hours (GTH) for its VIX options and S&P 500 Index options (SPX) to almost 24 hours per business day, five days a week. They did this with the intention to give further access to global participants to trade U.S. index options products exclusive to CBOE. These products are based on both the SPX and VIX indices.
This move allowed CBOE to meet growth in investor demand. These investors want to manage their risk more efficiently, and the extended hours could help them to do so. With it, they can react in real-time to global macroeconomics events and adjust their positions accordingly.
Essentially, they can track popular market sentiment and choose the best stocks according to the VIX’s movements.
The Takeaway
CBOE, or CBOE Global Markets, Inc., is more than just a hub of global exchanges. CBOE facilitates the trading of various securities across an array of equity and derivatives trading platforms. In addition, CBOE offers educational training and product innovations.
Like other global exchanges, CBOE will offer extended trading hours in 2026, ranging from 23 hours to 24 hours per day, five days a week.
SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.
With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.
FAQ
What does CBOE do?
CBOE is the biggest options exchange worldwide. It offers options contracts on equities, indexes, interest rates, and more. CBOE is also known for creating the so-called fear index, or VIX — a widely used measure of market volatility.
Is the CBOE only for options trading?
No. While CBOE is known primarily for its roles as an options trading platform, it also operates four equity exchanges, as well as other trading platforms like the CBOE Futures Exchange (CFE), for trading this type of derivative.
What are derivatives?
The term derivatives is used to describe four main types of investments that are tied to underlying investments: futures, options, swaps, and forwards. Each of these types of derivatives can be used to trade an underlying asset such as stocks, foreign currencies, commodities, and more, without owning the underlying security.
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Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
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