Global Derivatives 2024 Highlights

Cboe Community,

As 2024 winds down, I am reflecting on the past year for our Global Derivatives business at Cboe.

This was my first full year leading Global Derivatives after taking the helm in October 2023. We hit the ground running at the start of the year and never really slowed down. Interest in options trading continued to grow throughout the year, creating opportunities for us, as well as a stronger need for advocacy and education.

Options volumes remained strong throughout the year, with average daily volume (ADV) for Cboe's proprietary index options product suite reaching an all-time high of 4.23 million contracts in the third quarter of 2024. In addition to steady volumes, we continued to reliably operate the world’s leading options exchanges, launched new products, enhanced our advocacy efforts and ramped up our educational offerings. We are driven by a desire to make options trading more accessible, with the right tools and education to meet the needs of investors of all kinds.

Accessibility

One of the key drivers of accessibility is simply making options trading available on more platforms. Meeting traders where they are is instrumental in helping more people access the benefits of options trading. In October, we announced plans to partner with Robinhood as they launch index options, greatly expanding retail access. The launch of index options on Robinhood was a long-time in the making and comes with important guardrails and education to ensure new options traders on the platform are well prepared. 

In addition to expanding where index options are available, we launched several products and enhancements this year to create greater accessibility in the market. Whether it’s a product that provides access to a high-priced underlying asset, like Bitcoin, or one that delivers volatility trading to a new segment of the market, our products are always developed with a solutions-focused approach.

Just last week, Cboe launched the first cash-settled index options based on the Cboe Bitcoin U.S. ETF Index (CBTX), providing market participants with exposure to spot Bitcoin ETFs and indirectly to Bitcoin itself. These SEC-regulated options are cash-settled, simplifying the trading process.

Similarly, earlier this year, Cboe expanded its partnership with FTSE Russell by announcing our intention to list cash-settled index options on FTSE’s benchmark bitcoin and ether indices, addressing the growing demand for crypto-related exchange-traded derivatives.

In the volatility space, we launched Variance Futures and Options on VIX Futures. Variance Futures are designed to manage volatility risks and express market views by trading the spread between implied and realized volatility, while Options on VIX Futures offer a new tool to manage U.S. equity market volatility, accessible to a broader range of market participants with daily expiries 

We also launched new products that help derivatives traders gain exposure to other economies worldwide. In collaboration with MSCI, Cboe introduced index options on three MSCI Indices. These options provide efficient hedging for global equity exposure, with smaller contract sizes making them more accessible to retail investors. Cboe also launched iBoxx $ Emerging Market Bond Index futures (IEMD), offering exposure to U.S. dollar-denominated bonds from emerging markets.

Amid product launches in the U.S., Cboe Europe Derivatives Exchange saw steady growth and increased participation. IMC and Interactive Brokers became direct trading participants on CEDX, highlighting the growing enthusiasm for derivatives trading in Europe and making it more accessible to a large segment of the European market. To further support the growth of Derivatives trading in Europe, we also brought the Options Institute to the region in 2024. We are excited to grow our educational offerings in Europe next year now that the OI is established across the pond. 

Outside of the U.S. and Europe, we spent time in Asia Pacific, learning more about market participants in the region and how we can support them as they seek access to our markets. Next year, we look forward to becoming even more ingrained in the region with dedicated resources. 

Advocacy

Options trading continues to increase in popularity as more people realize the wealth generation and risk management benefits of options. Though options are increasingly popular, they are also increasingly scrutinized.

Misconceptions about the risks of options trading persist, despite evidence to the contrary, harming investors. As a leader in the industry, we feel obligated to correct this myth. Options are valuable tools for risk management, income generation, and speculation, helping investors protect and grow their wealth. Cboe is committed to advocating for accessible options trading, providing education, and partnering with industry members to ensure investors understand the risks and opportunities of options trading. We commend retail brokers for their educational efforts and emphasize that educating investors about options is crucial for their financial future.

In addition to dispelling myths, we focused much of our advocacy efforts this year on supporting the retail trading community. We collaborated with industry partners to help provide more robust education and resources to these traders and met with policymakers to discuss the benefits and risks of options. As Fred Tomczyk shared in an Insights article, the influx of investors who are interested in participating in the options markets benefits everyone, and we need to find ways to embrace new options traders.

Outside of the retail conversation, we continued to focus on improving markets for institutional investors, too. The approval of margin relief for index options in March was the result of important advocacy. Margin relief for cash-settled index options enhances accessibility for investors seeking alternatives to ETF options and we were proud to lead the charge on bringing this to the market.

Throughout this year, Cboe also worked to provide more accessible options data through the Cboe One Options Feed. Our intention was to move forward with Cboe One Options Feed, a market data feed that delivers consolidated quote and trade information for Cboe’s four U.S. options exchanges. However, the SEC disapproved Cboe’s proposal to amend the OPRA Plan relating to dissemination of exchange proprietary data. We believe high-quality, real-time data is important for all options traders and feel strongly that a lower cost option is necessary for the betterment of the market. Cboe is now evaluating how to proceed.

2025

Looking ahead, Cboe Global Derivatives will continue doing what we do best: shaping how global investors manage risk and opportunity in the evolving financial landscape. In addition to supporting the strength of the growing U.S. options market, we will continue to seek ways to bring our successful U.S. playbook to other regions. In Europe, interest in derivatives continues to grow steadily and we are excited to welcome more participants to Cboe Europe Derivatives Exchange (CEDX). 

Most importantly, we will continue listening to you, our valued customers, to find opportunities to improve our markets for your benefit. We pride ourselves on building transparent and liquid risk transfer solutions at global scale. Thank you for choosing Cboe and for your partnership this year. We are looking forward to an even better 2025. 

Happy holidays!

Cathy Clay | Global Head of Derivatives