Cboe Global Markets Inc. is exploring listing perpetual futures based on the Cboe Volatility Index, as US exchanges race to bring the highly levered instruments that dominate the crypto market to new asset classes. The VIX measures how volatile S&P 500 options traders think the next 30 days will be, and currently, there is no way to trade the level of the index directly.
Rob Hocking, global head of derivatives at Cboe, said at the Bloomberg Intelligence Derivatives Market Structure Conference in New York City on Sept. 30 that once there is more clarity about how perpetual futures are regulated in the US, Cboe will explore listing VIX perps. "Right now, things that we're exploring are the VIX, for example," he said.
Cboe already lists futures and options on the VIX, but exchange-traded funds tracking the index are imperfect proxies and can be costly. Perpetual futures never expire and include a funding mechanism to anchor the contract at the spot price, using leverage that can turbocharge gains and losses. Robinhood this week revealed it would offer US clients up to 10 times leverage on Bitcoin and Ether perpetuals.
Hocking noted options have advantages over perpetual futures, such as asymmetric payouts and capped losses. He called on regulators to provide clearer guidance on how perps are overseen, saying, "We need to know what are the rules of the game before we can play the game."
Source: Bloomberg Markets · Summarized by HeadlinesBriefing