CBOE (Chicago Board Options Exchange)

1. Definition

The CBOE (Chicago Board Options Exchange), founded in 1973, is the largest options exchange in the world. Headquartered in Chicago, it is the center of global options trading.

2. Historical Significance

Before CBOE, options were traded Over-the-Counter (OTC) with no standard terms. * Standardization: CBOE revolutionized finance by becoming the first marketplace to trade standardized, listed options (standardizing strike prices and expiration dates). * The 1973 Revolution: Its launch coincided with the publication of the "Black-Scholes Model," fueling the explosive growth of the modern derivatives market.

3. Key Products

CBOE is famous for its proprietary products and indices: 1. VIX Index: CBOE invented and owns the methodology for the VIX (The Fear Index). 2. SPX Options: Options on the S&P 500 Index. These are the most actively traded index options globally (European style, Cash settled). 3. LEAPS: Long-Term Equity Anticipation Securities (options with expiration dates longer than one year).

4. Characteristics

• Innovation Hub: CBOE is known for product innovation, creating new ways to trade volatility and risk.
• Crypto Pioneer: In 2017, it became the first major exchange to launch Bitcoin futures (though later paused and reintroduced).