Define Cboe Options Exchange

Cboe Options Exchange

The Cboe Options Exchange is a stock exchange that trades options.

The Cboe Options Exchange, which was founded in 1973, is the world's largest options exchange, with contracts centred on individual stocks, indices, and interest rates. The Chicago Board Options Exchange (CBOE) was renamed the Chicago Board Options Exchange (CBOE) in 2017 as part of a rebranding push by its owning company, Cboe Global Markets. 1 Traders refer to the Cboe as the exchange ("see-bo"). The Cboe Volatility Index (VIX), the most frequently used and acknowledged proxy for market volatility, was created by Cboe.

TAKEAWAYS IMPORTANT

• The Chicago Board Options Exchange was formerly known as the Cboe Options Exchange (CBOE).

• The exchange became a holding company in 2010, with the exchange as its primary asset.

• Cboe Global Markets Inc. and the Cboe Options Exchange were renamed as Cboe Global Markets Inc. and Cboe Options Exchange, respectively, in 2017.

• The VIX volatility index, as well as many other volatility products, are housed at Cboe.

The Cboe Options Exchange: An Overview

Options, futures, U.S. and European stocks, exchange-traded products (ETPs), worldwide foreign exchange (FX), and multi-asset volatility products are among the asset classes and regions covered by Cboe. By value traded, it is the largest options exchange in the United States and the largest stock exchange in Europe. It is the second-largest stock exchange operator in the United States and a leading worldwide ETP trading market.

The Cboe Clearing Corporation, which eventually became the Options Clearing Corporation (OCC), the industry clearinghouse for all U.S. options trading, was founded by the exchange.

The Cboe's business extends beyond basic transaction executions; in 1985, it established The Options Institute, an educational arm dedicated to educating investors all over the world about options. In addition, the organisation provides seminars, webinars, and online courses, as well as professional development.

Products from Cboe

The exchange provides access to a wide range of products, including put and call options on hundreds of publicly listed companies, exchange-traded funds (ETFs), and exchange-traded notes (ETNs). Investors often utilise these instruments to hedge their positions and generate profits by selling covered calls or cash-secured puts.

The Standard & Poor's 500, S&P 100, Dow Jones Industrial Average, Russell indexes, selected FTSE indexes, Nasdaq Indexes, MSCI indexes, and sector indexes, including the S&P 500's 10 sectors, are among the stock and sector indexes accessible.

The exchange provides social media indexes as well as speciality indexes for a variety of options strategies, including "put write," butterfly, and collar.

Finally, there's the VIX index, which is the most widely used indicator of stock market volatility. This Index is calculated using real-time pricing for near-the-money options on the S&P 500 Index (SPX) and is intended to reflect investors' consensus opinion of future (30-day) projected returns.

Volatility in the stock market. The VIX Index is known as the "fear gauge" among traders because it tends to soar to extremely high levels when investors feel the market is extremely negative or unstable.

The Cboe Global Markets' volatility franchise's main index is the VIX Index. Volatility indexes on broad-based stock indexes, ETFs, individual stocks, commodities, and other speciality indexes are included in this category.