How the Cboe Ecosystem Unlocks Opportunities for the Markets

Of all the things that make Cboe unique, the interconnectedness of our ecosystem may be my favorite. We operate exchanges across asset classes and around the world, and provide indices, market data and analytics that cover it all. No piece of our ecosystem exists in a silo.

I have a special appreciation for this ecosystem in my role leading our Global Cboe Data Vantage business.  Data Vantage is the thread connecting Cboe’s asset classes and geographies — fueling innovation, introducing investors to new markets and strengthening the ties between our cash and spot markets and our derivatives markets.

An Entrance to New Markets

Cboe operates exchanges around the world, meeting our customers where they are with solutions tailored to their needs. Notably, we operate equities exchanges in 7 of the top 10 global equities markets, making our market data unparalleled. That data helps investors understand the market before they enter it and enhances their experience when they are participating in it. It also enables us to develop new derivatives products, bringing more participants to the markets and generating more data, which can be leveraged by participants to inform their trading, and by Cboe to further improve our markets.

Plus, this market data is all available anytime, anywhere via Cboe Global Cloud, making it even easier for investors to access new geographies from where they are. As Cboe’s Global President Dave Howson noted in a recent article, more than 75% of Global Cloud customers taking U.S. data feeds reside outside the U.S. Dave’s article digs into this trend more, but the data shows that people are interested in trading the U.S. markets. The Cboe ecosystem provides the entry point they need to first understand, then access, those markets and participate in them successfully.

The Ecosystem in Action

Cboe's Target Outcome Indices are an excellent example of this ecosystem in action. Target Outcome Indices are options-based strategy benchmarks designed to provide targeted returns relative to a referenced U.S. domestic stock market index, and in the case of buffer protect strategies, to limit downside risk.

The indices were developed because of conversations we had with customers who were looking for a way to capture upside, while limiting downside. It starts with an index, which lays the foundation for Exchange Traded Funds (ETFs) based on the index. Many of those ETFs utilize the flexibility and customization provided by FLEX options and are listed on a Cboe exchange. As part of our ecosystem, Cboe has worked to improve the underlying contracts, making it easier to implement the strategies used in the ETF and manage the product.

This leads to price improvement and brings more participants to the market, generating liquidity and creating more data to help us better understand the market environment and inform our risk management and analytics platforms, helping end investors make more informed trading decisions.

And it all starts and ends with our customers. We listen, then build solutions that fit their needs and close the loop by providing robust data and analytics that enhance their trading experience. The Cboe ecosystem is fueled by what our customers want and need, and it is perpetuated by ensuring that we continuously deliver those solutions.

Looking Ahead

In Cboe Data Vantage, we keep the ecosystem moving. Index creation and calculation, order execution, risk management and analytics are all essential pieces of our business. We collaborate closely with our Equities and Derivatives teams to identify what is top of mind for our customers and stay aligned. Our ecosystem is like a well-oiled machine, each of us focusing on our areas of expertise to collectively create the desired output.

Looking ahead, we plan to continue distributing our market data globally, making more data sets available, entering new geographies and enhancing accessibility. This expansion will help us unlock the potential of the markets for more participants worldwide. We are particularly excited about the potential of our data, analytics and tools to unlock greater access to the U.S. derivatives market—an asset class that continues to grow and where we see great potential for more participation. We will move forward with a customer-first mindset, leveraging the ecosystem to unlock growth opportunities in markets worldwide.

The Cboe ecosystem exemplifies the power of interconnected markets and data-driven innovation. The seamless connection between various asset classes and geographies not only meets the diverse needs of our customers but also drives market participation and liquidity generation. This holistic approach ensures that investors have access to comprehensive market data, robust analytics and innovative products. As we continue to listen to our customers and adapt to their evolving needs, the Cboe ecosystem will remain a vital piece of our vision, fostering growth and opportunity for investors of all kinds.

^{The information provided is for general education and information purposes only. No statement provided should be construed as a recommendation to buy or sell a security, future, financial instrument, investment fund, or other investment product (collectively, a “financial product”), or to provide investment advice. © 2024 Cboe Exchange, Inc. All Rights Reserved}