CoinDesk
Cboe is exploring perpetual futures tied to the VIX, the S&P 500's closely watched measure of expected 30-day volatility, according to Bloomberg. The idea is at an early stage, with no contract specifications or filing. It would bring a trading structure popularized by crypto exchanges to one of Wall Street's busiest volatility markets.
Why it matters
Conventional VIX futures expire, forcing traders who want continuous exposure to move into later contracts. Those rollovers can weigh on returns, a drawback that also drew scrutiny when BTC futures ETFs debuted in late 2021. Perpetual futures avoid expiry and instead use periodic funding payments to help keep the contract price aligned with its reference index.
That makes Cboe's interest a notable sign of convergence between crypto and traditional derivatives. But VIX is a calculation derived from options prices, not an asset market makers can buy and sell directly. Marex Solutions analysts cautioned that removing expiry does not eliminate hedge costs or basis risk, or make a perpetual contract a cheaper substitute for options.
Market impact
A Cboe contract could broaden access to continuous VIX exposure and attract traders to volatility markets. More trading and market-maker hedging across VIX and S&P 500 derivatives could also help keep related products' prices closer together, though those effects depend on a product reaching the market.
Crypto venues have already tested the concept: Gate offers a VIX/USDT perpetual contract, but the market has little noticeable volume. Hyperliquid has listed futures tied to a Bitcoin implied-volatility index. For Cboe, the unanswered question is how funding would anchor a perpetual contract to an index that cannot be bought as a cash asset.
Frequently asked questions
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How would a VIX perpetual future differ from an existing VIX future?
It would not expire, so traders would not need to roll a position into a later contract to maintain exposure. Periodic funding payments would help align its price with the VIX.
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Has Cboe filed to launch a VIX perpetual contract?
No. Cboe's exploration is at an early stage, with no contract specifications or filing announced.
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Why is hedging a VIX perpetual contract difficult?
The VIX is calculated from S&P 500 options prices and cannot be bought as a cash asset. That complicates market makers' efforts to hedge exposure to a contract tied to it.
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Would a perpetual contract eliminate the costs of trading VIX exposure?
No. It would remove the need to roll expiring futures, but funding payments, hedge costs and basis risk would remain.
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Are crypto trading venues already offering volatility derivatives?
Gate offers a VIX/USDT perpetual contract with little noticeable volume. Hyperliquid has listed futures tied to a Bitcoin implied-volatility index.
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