Chicago Board Options Exchange (CBOE)

The Chicago Board Options Exchange (CBOE) is the world’s largest options exchange, founded in 1973 and headquartered in Chicago. It lists options on individual stocks, indexes, ETFs, ETNs and other assets, and is the originator of the CBOE Volatility Index (VIX), the most widely used gauge of U.S. equity-market volatility. The exchange and its parent company operate a diverse global marketplace for options, futures, equities and multi-asset volatility products.

Key takeaways

• Founded in 1973, CBOE is the largest options exchange in the U.S.
• Originator of the VIX, the leading short-term volatility index.
• Offers options on equities, ETFs, indexes, and specialty products.
• Plays a central role in clearing, education and product innovation for options markets.

History and structure

• Launched in 1973 as the Chicago Board Options Exchange, initially listing call options only; put options were added in 1977.
• Introduced long-dated options (LEAPs) in 1990.
• In 1985 CBOE created The Options Institute to provide investor and professional education about options.
• The exchange later became part of a holding company structure and, following corporate rebranding, operates alongside CBOE Global Markets’ broader exchange and index businesses.

Markets and scope

CBOE facilitates trading across multiple asset classes and geographies:
* Equity and index options (including S&P 500, S&P 100, Dow Jones Industrial Average, Russell and Nasdaq indexes).
* Options on ETFs and ETNs.
* Futures, global foreign exchange (FX), and exchange-traded products (ETPs).
* A range of volatility products and specialty indexes, including social-media and strategy-based indexes.

CBOE is also a major marketplace for ETP trading and a significant stock-exchange operator in global markets.

Clearing and market infrastructure

CBOE helped establish industry clearing infrastructure that evolved into the Options Clearing Corporation (OCC), the central clearinghouse for U.S. options. This clearing framework supports trade settlement, margining and counterparty risk management across U.S. options markets.

Products and investor uses

Common products and typical investor uses include:
* Standard call and put options on stocks, ETFs and ETNs — used for hedging and speculation.
* Income strategies such as selling covered calls or cash‑secured puts.
* Index options and strategy-based products (e.g., put‑write, butterfly, collar).
* Specialty indexes that track specific themes or sectors.

The VIX and volatility franchise

The CBOE Volatility Index (VIX) measures expected 30‑day volatility of the S&P 500 by referencing near‑the‑money SPX option prices. Often called the “fear gauge,” the VIX typically spikes when markets are highly uncertain or bearish. The VIX is the flagship of CBOE’s volatility index suite, which includes volatility measures for broad indexes, ETFs, individual stocks and commodities.

Trading activity

CBOE’s options volume has grown substantially; for example, in Q1 2022 the exchange group reported a record total of 830.3 million options contracts traded, with an average daily volume of about 13.4 million contracts.

Why CBOE matters

CBOE is central to the modern options ecosystem: it pioneered listed options trading, developed key products and benchmarks (notably the VIX), supported industry clearing infrastructure, and provides education and market structure that help investors and professionals access and manage options-based strategies.