CboeEdit
Cboe, officially known as Cboe Global Markets, Inc., is one of the world’s leading operators of financial markets, with a long history of pioneering products and venues that expand the range of ways investors can manage risk and seek opportunity. Born in Chicago in 1973 as the Chicago Board Options Exchange, it helped unlock the potential of standardized options and sophisticated hedging strategies, turning risk into a tradable asset class. Over the decades it evolved into a diversified global markets operator, now including multiple options and futures exchanges, a broad data and index business, and a family of brands under the Cboe Global Markets umbrella. The firm is especially associated with the Cboe Volatility Index, known colloquially as the VIX, which became a widely watched measure of market expectations for near-term volatility and a tool for risk management and strategic planning.
From a market-oriented perspective, Cboe stands as a core facilitator of price discovery, liquidity, and capital formation. By giving investors a structured mechanism to hedge, speculate, and diversify, it channels risk-bearing capacity into productive economic activity. Its competitive position is reinforced by a mixture of innovative product design, open access to a broad ecosystem of brokers and participants, and a regulatory environment that emphasizes transparency, standardization, and robust risk controls. For a capitalist framework, the efficiency and resilience of markets depend on credible exchanges that align incentives, provide reliable data, and keep costs in check for a wide base of users, from retail investors to large institutions SEC-regulated entities and retail investor alike.
History
Origins and early innovations: The Chicago Board Options Exchange began operations in 1973, introducing standardized options contracts and a framework for centralized negotiation of risk. This innovation democratized access to risk management tools that had previously been the domain of specialized institutions. The move toward standardized contracts helped drive liquidity and transparency across the options market and laid the groundwork for a broad ecosystem of derivatives trading.
Growth of index and equity options: In the 1980s and 1990s, Cboe expanded its product line to include options on major stock indices, most famously the S&P 500, which broadened participation and enabled investors to express views on market direction with defined risk.
The VIX and market psychology: In 1993, Cboe introduced the VIX, the Volatility Index, which measures the market’s expectations of near-term volatility derived from S&P 500 options prices. The VIX became a widely cited barometer of investor sentiment and a key tool for hedging portfolio risk and constructing trading strategies.
Futures and volatility products: The exchange expanded beyond plain options, adding futures and related products that provided additional means to manage multi-asset risk and to speculate on volatility itself. This broadened the set of instruments available to participants and helped diversify the risk-transfer options available to markets.
Becoming a global markets platform: In 2017, Cboe Global Markets merged with Bats Global Markets, creating a more diversified, global network of options, equities, and futures venues. The Bats acquisition extended Cboe’s reach into new markets and technology platforms, including the equities venues that arrived with Bats and later integrated into the broader corporate family.
Ongoing expansion and adaptation: Since the merger, Cboe has continued to expand its product lines, data products, and international reach, while investing in technology and market structure to maintain liquidity, transparency, and reliability in a fast-changing trading environment. Its business model relies on a mix of trading fees, listing and access fees, and revenue from market data and indices, with a focus on delivering value through efficient, accessible markets CFE and EDGX platforms.
Markets, platforms, and infrastructure
Cboe operates a family of venues and related services designed to support a broad spectrum of market participants. Its platforms host:
Options and equity trading: A core suite of options exchanges and equity trading venues that provide listed contracts on a wide range of stocks and indices, enabling risk management and speculative activity for diverse clients. Futures and volatility products extend the reach into cross-asset trading and hedging.
Futures and volatility products: The Cboe Futures Exchange CFE and related volatility products give participants exposure to futures and products that track expected market volatility. These tools allow users to hedge macro- or event-driven risk and to implement sophisticated strategies around volatility regimes.
Data, analytics, and indices: Beyond trading venues, Cboe licenses market data, index calculations, and analytics used by traders and institutions to monitor price movements, measure risk, and implement systematic strategies. The VIX and related indices, as well as other benchmark products, are central to the firm’s value proposition for risk-aware investors VIX.
Global reach and consolidation: The acquisition of Bats Global Markets integrated a broad set of trading venues, expanding Cboe’s geographic footprint and technology footprint, while preserving a common framework for risk controls, surveillance, and regulatory compliance across multiple markets. The goal is to maintain liquidity and price discovery across a globally distributed trading ecosystem, with deregulated entry for competitive participation and transparent rules of operation CME Group as one of the principal competitors in the space.
Products and services
Options on equities and indices: Cboe’s options markets allow investors to hedge or speculate on the price movements of individual stocks and major indices, with standardized contracts that facilitate efficient risk transfer. Major index options, like those on the S&P 500, gained particular prominence for institutional portfolio management and hedging.
VIX and volatility instruments: The VIX, alongside related futures and options, provides a barometer of expected near-term volatility and a vehicle for expressing views on market turbulence. These instruments have become staples in risk management and tactical allocation for many market participants VIX.
Exchange-traded products and data: In addition to trading venues, Cboe offers a suite of data products, benchmarks, and analytics that investors rely on to inform decisions, monitor market conditions, and construct investment strategies. This includes licensing and distribution of market data to brokers, institutions, and researchers.
Market structure and access: As a market operator, Cboe emphasizes reliable technology, clear listing standards, and fair access to its venues. The system is designed to enable price discovery with visible order books and regulated, compliant trading activity across its platforms. This framework aims to balance liquidity provision with investor protections in a dynamic trading environment.
Regulation, governance, and the policy backdrop
Cboe operates under the U.S. securities and exchange framework, with oversight from the U.S. Securities and Exchange Commission and self-regulatory organizations such as FINRA. The market structure it represents rests on principles of transparency, best execution, and competitive pressure among multiple venues. Provisions such as Regulation NMS shape how orders are routed and how trades are executed across competing exchanges, with the aim of ensuring fair access and price discovery in a multi-venue ecosystem. From a business perspective, the emphasis is on robust risk controls, reliable technology, and clear, predictable rules that support liquidity and capital formation. Critics may push for more regulation or for mandates around governance and social objectives; proponents of a market-first approach contend that competitive dynamics, clear rules, and accountable management best serve investors and the economy at large.
A perennial topic in discussions about market structure concerns the role of high-frequency trading and other speed-enabled strategies. Advocates argue that such activity adds liquidity and improves market efficiency, while critics question the impact on retail traders and the potential for occasional disparities in execution quality. Proponents of a free-market approach contend that properly designed, transparent venues with strong surveillance and risk controls allow participants to adapt and innovate, whereas over-regulation risks reducing liquidity and raising costs for everyday investors. In this context, Cboe’s strategy has been to emphasize open access, competitive pricing, and strong compliance to foster durable liquidity and fair price discovery.
Controversies and debates from a conservative market-oriented lens often center on two themes. First, the allocation of resources toward innovation and risk management should come from market incentives and private investment rather than heavy-handed policy directives. Second, corporate governance and social policy advocacy by large financial firms should be subordinate to core economic functions—efficient trading, accurate data, and reliable settlement—so the market can perform its primary function: channeling capital toward productive enterprise. Critics on the left sometimes accuse exchanges of pursuing social or political agendas; defenders of a market-centric approach argue that focusing on profitability, risk management, and shareholder value yields the greatest economic benefits, while political activism can distort incentives and misallocate resources. When debates touch on “wokeness” or corporate activism, a straightforward position holds that markets should reward good governance, transparency, and performance, while activism should not undermine the core mission of facilitating voluntary exchange and risk transfer. This viewpoint emphasizes that the primary objective of exchanges is to serve investors and the broader economy through liquidity, efficiency, and reliable operation of fair markets.
See also