SEC approves Cboe's combined VIX options and futures orders
Rule ChangesNew order type bundles VIX options with VX futures in a single trade routed across two venues
2 days ago: SEC grants accelerated approvalNew here? Follow stories to track developments over time. Create a free account to get updates when stories you care about change.
Overview
Updated 1 hour agoVolatility traders can now place one order where they used to need two. On September 2, the Securities and Exchange Commission (SEC) approved Cboe Exchange's rule creating VIX future-option orders, which bundle Cboe Volatility Index (VIX) options with VIX futures (VX futures) in a single transaction.
Until now, executing both legs meant placing separate orders on two venues: the options traded on Cboe Exchange, the futures on Cboe Futures Exchange (CFE). The new order type routes the futures component to CFE automatically. The rule requires the futures leg to offset 10% to 125% of the options leg's delta risk, so the package must have genuine hedging value.
Approval took eight months and two amendments. The SEC received no public comments, and it cited good cause to accelerate approval beyond the usual comment window.
Why it matters
Volatility traders now execute VIX options and futures as one order, cutting execution risk and simplifying cross-venue hedging.
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People Involved
Organizations Involved
The options exchange where VIX options trade; filed the rule to bundle them with VX futures.
The federal regulator that reviews exchange rule filings under the Securities Exchange Act of 1934.
The venue where VX futures trade; receives the futures component of each VIX future-option order.
Timeline
January 2026 September 2026
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SEC grants accelerated approval
Latest ApprovalCommission approves rule with both amendments, citing good cause for accelerated action.
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Cboe files Amendment No. 2
FilingAmendment fixes terminology for consistency across proposed rule text.
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Cboe files Amendment No. 1
FilingAmendment narrows scope to VIX-specific orders, adds FLEX mechanics, allows IOC orders.
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SEC extends deadline to September 13
RegulatoryCommission adds 60 days, citing need for sufficient time to consider issues.
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SEC opens formal proceedings
RegulatoryCommission institutes proceedings under Section 19(b)(2)(B) to decide whether to approve.
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SEC extends review period
RegulatoryThe Commission designates a longer period within which to act on the proposal.
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SEC publishes proposal for comment
PublicationThe proposed rule appears in the Federal Register, opening a public comment period.
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Cboe files VIX future-option order proposal
FilingCboe Exchange submits rule change to permit orders bundling VIX options with VX futures.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
Cboe launches VIX futures (2004)
Cboe Futures Exchange listed futures on the Cboe Volatility Index, the first exchange-traded volatility futures product. The contract let traders take direct positions on expected S&P 500 volatility.
VIX futures built a liquid market for trading volatility directly, complementing existing VIX options on the options side.
The VIX complex grew into one of the most-traded index products globally, with Cboe's futures and options venues serving as the two primary liquidity pools.
The 2026 rule depends on both venues: VIX options on Cboe Exchange and VX futures on CFE. The liquidity built over two decades makes the combined order type viable.
Cboe launches VIX options (2006)
Cboe listed options on the VIX, allowing investors to trade volatility options on the same exchange that hosted the index. The product rapidly became the most actively traded index option.
VIX options gave hedgers a second tool alongside futures, creating spread and arbitrage opportunities between the two.
The pairing of VIX options and VX futures became the standard volatility trading toolkit, but traders always had to manage two orders on two venues.
The new order type directly addresses the friction that has existed since 2006: executing the two legs of a volatility hedge as one package.
Volmageddon (2018)
The VIX spiked more than 100% in a single day, wiping out short-volatility exchange-traded notes like the VelocityShares Daily Inverse VIX Short-Term ETN (XIV), which lost more than 80% of its value overnight.
XIV holders lost nearly all their investment, and volatility-related funds faced forced liquidations, amplifying the spike.
Regulators and exchanges became more attentive to risk mechanics in volatility products, including how offsets and hedges are structured.
The rule's 10% to 125% risk offset requirement ensures each VIX future-option order has genuine hedging value, a design guardrail informed by how volatility products can concentrate risk.
