Investor's wiki
en English
Navigation
Home Glossary
InvestingStocksBondsCryptoPersonal FinanceFundamental AnalysisTechnical AnalysisTradingBankingTaxes
Disclaimer Terms of Use Privacy Policy Cookie Policy
Navigation
Home Glossary
InvestingStocksBondsCryptoPersonal FinanceFundamental AnalysisTechnical AnalysisTradingBankingTaxes
Disclaimer Terms of Use Privacy Policy Cookie Policy

CBOE Options Exchange

CBOE Options Exchange
TradingOptions and Derivatives TradingOptions and Derivatives

What Is the CBOE Options Exchange?

Founded in 1973, the CBOE Options Exchange is the world's biggest options exchange with contracts zeroing in on individual equities, indexes, and interest rates.

Originally known as the Chicago Board Options Exchange (CBOE), the exchange changed its name in 2017 as part of a rebranding exertion by its holding company, CBOE Global Markets. Traders allude to the exchange as the CBOE ("see-bo"). CBOE is additionally the originator of the CBOE Volatility Index (VIX), the most widely utilized and recognized proxy for market volatility.

Understanding the CBOE Options Exchange

CBOE offers trading across multiple asset classes and topographies, including options, futures, U.S. also, European equities, exchange-traded products (EPTs), global foreign exchange (FX), and multi-asset volatility products. It is the biggest options exchange in the U.S. also, the biggest stock exchange in Europe, by value traded. It is the second-biggest stock exchange operator in the U.S. furthermore, a top global market for ETP trading.

The exchange has a rich history, including the creation of the CBOE Clearing Corp., which later turned into the Options Clearing Corporation (OCC), the industry clearinghouse for all U.S. options trades.

The business of the CBOE goes past simple trade executions, and in 1985 it shaped The Options Institute, its instructive arm, developed to teach investors around the world about options. Furthermore, the company offers workshops, online courses, and online courses, including learning for experts.

CBOE Products

The exchange offers access to numerous different products, starting with, of course, put and call options on a large number of publicly traded stocks, as well as on exchange traded funds (ETFs) and exchange traded notes (ETNs). Investors typically utilize these products for hedging and income production through the selling of covered calls or cash-got puts.

There are options accessible on stock and sector indexes, including the Standard and Poor's 500, S&P 100, Dow Jones Industrial Average, Russell indexes, chose FTSE indexes, Nasdaq Indexes, MSCI Indexes, and sector indexes including the 10 sectors held inside the S&P 500.

The exchange offers social media indexes and specialty indexes covering several options strategies, for example, "put compose," butterfly, and collar.

Finally, the VIX index is the chief barometer of equity market volatility. This Index is based on real-time prices of [near-the-money](/close the-cash) options on the S&P 500 Index (SPX) and is designed to mirror investors' consensus perspective on future (30-day) expected stock market volatility. Traders call the VIX Index the "dread measure" since it will in general spike to exceptionally high levels when investors accept the market is extremely bearish or shaky.

The VIX Index is likewise the leader index of the CBOE Global Markets' volatility franchise. This includes volatility indexes on broad-based stock indexes, ETFs, individual stocks, commodities, and other specialty indexes.

The CBOE made the VIX Index in 1993. It has since turned into the de facto barometer of U.S. equity market volatility.

Highlights

  • The CBOE is an important options exchange based in Chicago, founded in 1973.
  • The CBOE Options Exchange was beforehand the Chicago Board Options Exchange (CBOE).
  • In 2010 the exchange incorporated as a holding company with the exchange as its principal asset.
  • CBOE is home to the VIX volatility index and numerous other volatility instruments.
  • In 2017 the holding company and exchange rebranded as CBOE Global Markets Inc. furthermore, the CBOE Options Exchange, separately.

FAQ

What number of Options Contracts Trade on the CBOE?

In Q1 2022, total volume across CBOE's options exchanges arrived at 830.3 million options contracts, a record amount. Quarterly average daily volume (ADV) likewise arrived at another all-time high of 13.4 million contracts traded each day.

When Were LEAP Options First Listed on the CBOE?

LEAPs (Long-Term Equity AnticiPation Securities) are long-dated options listed on exchanges, with lapses longer than one year and up to at least three years. The CBOE originally presented listed LEAP trading in 1990.

When Were Put Options First Listed on the CBOE?

At the point when the CBOE sent off in 1973, it just listed call options. It was only after 1977 that the exchange added put options too.