The CBOE stands for the Chicago Board Options Exchange, which is one of the largest options exchanges in the world. It is a popular destination for traders seeking to gain exposure to financial markets with options and other derivatives, as it provides a platform for the trading of equity options, index options, and more.
The CBOE was founded in 1973 as the first options exchange in the United States, and it developed the first exchange-traded options contract on the S&P 500 index in 1983. Today, the exchange operates under a hybrid market model, with trades executed both electronically and in trading pits.
The CBOE is also known for its development of the CBOE Volatility Index, or the VIX. The VIX is the measure of the stock market’s expectation of volatility over the next 30 days based on S&P 500 index options. The VIX is often referred to as the ‘fear index’, as it reflects the level of uncertainty and stress among traders regarding future market movements.
The VIX is expressed as a percentage, and it is calculated by the CBOE using the prices of S&P 500 index options. It tends to rise during periods of market turmoil or uncertainty. In periods of stability and confidence, it falls. Thus, traders use the VIX to gauge market sentiment and risk aversion.
The VIX is negatively correlated with the stock market, which makes it a popular investment among traders who want to diversify their portfolio or hedge existing open positions.
ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.