Derivatives and securities exchange network Cboe Global Markets, Inc has announced that its new Cboe S&P 500 Variance Futures are planned to begin trading on Monday, September 23, on the Cboe Futures Exchange, LLC (CFE).

As investors continue to navigate an uncertain macroeconomic environment, the new Cboe S&P 500 Variance Futures will aim to provide market participants with an additional tool to calculate implied volatility of the U.S. equity market as measured by the S&P 500 Index, and to manage volatility risks and express directional views.

The futures are designed to offer a streamlined approach to trading the spread between implied and realized volatility, enabling market participants to take advantage of discrepancies between market expectations and actual outcomes.

“Cboe’s suite of proprietary products, including the highly popular SPX options and VIX options and futures, has served the needs of market participants globally for many decades,” said Catherine Clay, Head of Global Derivatives at Cboe. “As investor needs for hedging, trading, diversification and asset allocation continue to evolve, we are committed to expanding our offerings to meet their demands. We look forward to launching the next generation of volatility products – including Cboe S&P 500 Variance Futures and options on VIX futures coming later in October, subject to regulatory review – which we expect will further equip our customers with new and efficient tools to trade volatility.”

Cboe S&P 500 Variance Futures are expected to appeal to a wide range of market participants with diverse investment objectives, including volatility traders and hedge funds seeking capital efficiency and transparency, institutional investors managing equity volatility risk and expressing directional views, portfolio managers aiming for enhanced diversification and risk premia capture, and dealers and market makers transitioning from OTC variance swaps to standardized products.

The Cboe S&P 500 Variance Futures contracts will settle based on a calculation of the annualized realized variance of the S&P 500 Index. The realized variance will be calculated once each day from a series of values of the S&P 500 Index beginning with the closing index value on the first day a VA futures contract is listed for trading and ending with the special opening quotation (SOQ) of the S&P 500 Index on the final settlement date of that contract.

The contracts will quote and trade directly in variance units, offering a simplified approach to managing and trading variance exposure. With a contract size of $1 and settlement aligned with standard SPX options (generally settling the third Friday of the month), these futures are designed to integrate seamlessly into market participants’ existing trading strategies.

Additionally, Cboe expects to introduce trading in options on VIX Futures starting October 14, subject to regulatory review. The planned launch of these products underscores Cboe’s ongoing efforts to expand the accessibility and functionality of its SPX and VIX product suite to meet growing customer demand.