CHICAGO and MIAMI, Oct. 16, 2024 /PRNewswire/ -- Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, and Robinhood Markets Inc. today announced at the HOOD Summit in Miami, Florida, Robinhood's upcoming launch of Cboe's index options on its platform. For the first time, Robinhood customers will soon be able to trade index options – including Cboe's flagship S&P 500 Index (SPX) options, Cboe Volatility Index (VIX) options, Russell 2000 Index (RUT) options and Mini SPX (XSP) options – expanding their trading capabilities on its platform.
Cboe's proprietary suite of index options will provide Robinhood's customers potential new ways to gain broad U.S. market exposure, hedge against U.S. large-cap and U.S. small-cap equity market volatility, generate income and capitalize on market movements1 on Robinhood's platform. Index options offer the benefits of cash-settlement (accounts are debited or credited in cash; there is no physical transfer of shares) and European-style exercise (options expire on their expiration date; there is no risk of early assignment).
"The rise of the retail investor is one of the greatest forces reshaping financial markets today," said Dave Howson, Global President at Cboe Global Markets. "Retail traders have expanded their financial knowledge and trading experience in recent years to become much more sophisticated, and now, they are seeking new opportunities to further elevate their trading strategies. Cboe's proprietary index options are among some of the world's most popular, liquid and actively traded options products, which we believe will be a welcome addition to the retail trader's toolkit. Cboe's index options have long been used by institutional investors to manage risk and build wealth. Now, with Robinhood offering index options to its growing user base, we are excited even more investors may access the utility of our products."
Robinhood makes Cboe Global Indices Feed, which provides real-time index values for products like SPX, VIX and RUT options, available to its customers. The feed may offer additional data to support customers when making their own trading decisions.
"Robinhood continues to deliver innovative and intuitive trading solutions that empower retail investors, and our collaboration with Cboe aligns perfectly with that mission," said Steve Quirk, Chief Brokerage Officer at Robinhood. "As our customers have grown, they have asked us for access to more advanced assets including index options, which allow them to diversify their portfolio and better manage risk. Adding index options to Robinhood is a natural extension of our product offering and has been one of the most requested asset classes by our customers. This will be another powerful tool to help them navigate their financial future."
Demand for options trading has risen among both retail and institutional investors who may be seeking tools to manage risk and capture market opportunities. In 2023, total U.S. options volumes exceeded 11 billion contracts, marking the fourth consecutive year of record volumes and a 126% increase since 20192. Average daily volumes this year through third-quarter 20243 was 47 million contracts, an 8% increase compared to the same period last year.
Cboe's proprietary product suite has similarly seen increasing investor participation, with average daily volumes reaching a record high of 4.2 million contracts during third-quarter 2024, up 13% from third-quarter 2023. In response to growing investor demand, Cboe's Options Institute, a leader in options education for more than 35 years, has expanded its offerings to include free online courses, webinars, interactive tutorials and insights from top market experts and academics, all tailored to help retail traders – whether beginners or seasoned investors – enhance their understanding of index options and build the knowledge they need to trade with confidence.
"As we move through 2024, one theme is clear: the need for robust risk management tools has never been greater and we see both institutional and retail participants, domestic and international, increasingly turning to options," said Catherine Clay, Global Head of Derivatives at Cboe Global Markets. "We see that investors are trading options with both longer and shorter durations and utilizing various strategies – whether hedging event risk, systematically selling call and put spreads to generate income, or trading options within a shorter time horizon to capture intraday moves. The U.S. options market has never been more vibrant and robust, and, as the options industry leader, Cboe remains committed to providing all investors access to this deep and growing liquidity pool."
For more information on Cboe's proprietary index options and educational offerings, visit: https://go.cboe.com/youhaveoptions.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives and FX across North America, Europe and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.
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Trading in futures and options on futures is not suitable for all market participants and involves the risk of loss, which can be substantial and can exceed the amount of money deposited for a futures or options on futures position. You should, therefore, carefully consider whether trading in futures and options on futures is suitable for you in light of your circumstances and financial resources. You should put at risk only funds that you can afford to lose without affecting your lifestyle. For additional information regarding the risks associated with trading futures and options on futures and with trading security futures, see respectively the Risk Disclosure Statement Referenced in CFTC Letter 16-82 and the Risk Disclosure Statement for Security Futures Contracts. Certain risks associated with options, futures, and options on futures and certain disclosures relating to information provided regarding these products are also highlighted at https://www.cboe.com/us disclaimers.
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Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security vulnerabilities and breaches; our ability to attract and retain skilled management and other personnel; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; global expansion of operations; factors that impact the quality and integrity of our and other applicable indices; our ability to manage our growth and strategic acquisitions or alliances effectively; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit, counterparty, investment, and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the impacts of pandemics; the accuracy of our estimates and expectations; litigation risks and other liabilities; and risks relating to digital assets, including winding down the Cboe Digital spot market and transitioning digital asset futures contracts to CFE, operating a digital assets futures clearinghouse, cybercrime, changes in digital asset regulation, and fluctuations in digital asset prices. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings made from time to time with the SEC.
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1 Cboe's proprietary index options are available for trading on a number of retail brokerage platforms. Please consult your retail broker for more information.
2 Source: OCC
3 Source: OCC
SOURCE Cboe Global Markets, Inc.