Cboe Global Markets Plans to Launch Options on VIX Futures

Cboe Global Markets has unveiled plans to introduce options on Cboe Volatility Index (VIX) futures, with trading scheduled to commence on October 14, pending regulatory review. This new product will be available on the Cboe Futures Exchange (CFE) and is expected to complement Cboe's existing VIX Index options.

The forthcoming options on VIX futures will be European-style, meaning they can only be exercised at expiration, and will physically settle into front-month VIX futures. This new offering aims to provide market participants with additional tools for managing equity market volatility. Unlike securities-based VIX Index options, these options will be regulated by the Commodity Futures Trading Commission (CFTC), allowing a broader range of market participants, including those restricted from accessing U.S. securities-based options, to use these instruments.

Rob Hocking, Head of Product Innovation at Cboe, remarked on the company's commitment to expanding its volatility trading suite: "As the pioneer in volatility trading, Cboe continues to expand its VIX complex with additional products and services targeted at helping market participants better manage portfolio risk and trade volatility. Given the increased trading activity we're seeing in VIX options and the strong demand for hedging tools this year, we're especially excited to expand our volatility toolkit to include these new options on VIX futures and our planned relaunch of variance futures coming in late September."

The new options on VIX futures are expected to be exclusively listed and traded on CFE, joining other notable volatility products, including VIX futures and the planned launches of Cboe S&P 500 Variance (VA) futures and Cboe S&P 500 Dispersion Index (DSPX) futures, subject to regulatory review.

"With the U.S. election quickly approaching, which has historically been a meaningful volatility catalyst for markets, we expect these tools will help meet customer demand to effectively manage risk," Hocking added.