Cboe Gets Green Light for VIX Future-Option Trading Shenanigans
Published Date: 9/2/2026
Notice
Summary
No summary available.
Analyzed Economic Effects
7 provisions identified: 4 benefits, 2 costs, 1 mixed.
Exchange Allows Combined VIX Option+Future Orders
Cboe will permit electronic “VIX future-option orders” that bundle VIX option legs traded on Cboe with VX futures legs traded on Cboe Futures Exchange (CFE). The package executes only if both the VIX option component and the VX futures component can trade (futures are communicated to CFE for execution), and VIX future-option orders are electronic only and may be entered as Day or Immediate-or-Cancel (IOC).
Mandatory Risk-Offset (Delta) Requirement
A VIX future-option order must be grouped so each group’s delta is between -0.10 and -1.25 (described as a 10% to 125% risk offset). Users must include a reasonable delta value for each VIX option leg (the System uses user-submitted delta values to calculate compliance).
Futures Price Must Be Specified; Option Trade Nullified if Futures Fail
Users must specify a price for each VX futures leg when entering a VIX future-option order and the VX futures leg may only execute at that specified price permitted by CFE. If CFE reports the VX futures component cannot execute at the specified price, the Exchange will nullify the VIX option component (and notify the User) so the package does not result in a one-sided execution.
Futures Routing Requirement for Non-CFE Members
If a User is not a CFE member, they must have an agreement with one or more Exchange-designated futures commission merchants (FCMs) or introducing brokers (IBs) registered with the Exchange to route the VX futures component, and must designate the routing FCM/IB on each VIX future-option order. The Exchange will communicate the VX futures component to CFE on behalf of the designated FCM/IB.
FLEX VIX Future-Option Limitations
VIX future-option orders may be processed as FLEX orders, but the submitting FLEX Trader may not modify the terms of the VX futures legs (because VX futures terms are set by CFE). FLEX VIX future-option orders must include a specified price for each VX futures leg and the futures legs will be cancelled if they cannot execute at those prices.
Execution Venues, Auctions, and Simple Book Exclusion
VIX future-option orders may execute electronically via the complex order book (COB) or via complex auctions (COA, C-AIM, C-SAM) like other complex orders, but they may not execute against orders in the Simple Book. Price improvement and competition apply only to the VIX options components; VX futures components are fixed at the user-specified price.
Clearing, Jurisdiction, and Surveillance Split
Executed VIX option legs will clear at The Options Clearing Corporation (OCC) and VX futures legs will clear at CFE; the SEC retains jurisdiction over option-leg activity while the CFTC retains jurisdiction over futures-leg activity. Cboe and CFE will share order, trade, and regulatory information and each will enforce rules for the component under its jurisdiction.
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