Cboe Global Markets plans to expand trading hours on its Cboe Options Exchange (C1) for select equity options effective July 13, 2026, subject to regulatory approval, through the introduction of a morning Global Trading Hours (GTH) session and an afternoon Curb session. Traders Magazine spoke with Anthony Montesano, Head of Derivatives Market Structure at Cboe, to learn more about the planned expansion.
What problem is this expansion trying to solve? Is Cboe responding to investor’s demand for pre-market options trading, or is this primarily a competitive move against other exchanges?
Cboe is responding to demand for expanded hours in more options products. The general trend in markets has been towards shorter durations and additional trading time. This is evidenced in equity markets, which have already seen a significant extension of trading hours as a potential step towards near 24×5 trading. Several crypto products already trade 24/7. It is a natural extension of the options markets to have trading available beyond the traditional regular session hours, especially given that the related underlying securities are trading in extended sessions. Those looking to establish new or manage existing options positions may find opportunity and benefit from the added coverage.
How might retail and institutional traders experience differences in pricing, spreads, or execution quality during the new sessions?
The liquidity of an options contract is generally related to the liquidity of the associated underlying security. While underlying equity and options liquidity may be less robust during pre- and post-regular trading hour (RTH) sessions, Cboe was mindful to target only the most actively-traded and most liquid symbols for the expanded options hours. Cboe also restricts entry of market orders and triggering of stop orders outside of the RTH session. Instead, limit orders will be required. Further, Cboe systems have mechanisms to mitigate the risk of adverse execution prices for marketable limit orders when the bid/ask spread is deemed to be outside prescribed settings. Regarding access, Cboe and the OCC require members to be approved to trade in the extended sessions, ensuring access is permitted only to those that request it and have been authorized. Cboe further requires a specific designation on an order that is intended to participate outside of the RTH session. As with any new initiative, investor education and awareness remain paramount. Multiple layers of protection have been considered to mitigate the risk of negative experiences for both low-touch customers, like retail, as well as high-touch institutional customers.
What are the risks of trading options when underlying stocks haven’t fully opened?
There are certainly risks of trading options if the underlying security is not open. That is why Cboe will not open a class of options if the underlying security is not fully opened. Further, Cboe automatically halts an options class if its associated underlying security halts. These procedures apply to all trading sessions. On the other hand, there are clear advantages to having the ability to trade options while the associated underlying security is trading.
How will trading strategies need to adapt to the new sessions?
The availability of listed options outside of the traditional RTH session gives investors greater opportunity to express an opinion. Investors will now be able to better manage their positions when an event occurs before the RTH opening or after the RTH close. Further, options investors will now have an additional 15 minutes to avoid contra-exercise risk. This risk exists today when an options contract closes out-of-the-money but is exercised due to an event that moves the price of the underlying security after the RTH close. In such cases, an options investor can be assigned or have to deliver shares unexpectedly. This can result in significant economic impact and potential tax consequences. The additional 15 minutes of live trading post-RTH close allows investors to close positions upon an after-market event that occurs during the expanded time window.
How prepared are firms operationally for a longer trading day?
Cboe has worked extensively with options market participants and representative industry groups to prepare. Cboe has heard from the vast majority of Market-Makers and multiple consolidators and brokers representing retail and institutional customers that they will be ready for launch day.
Some have also shared that their customers, especially on the retail side, are eager and excited about the innovation of new trading windows for equity options, a benefit that has been available to proprietary index options users for many years.
We also continue to hear from foreign customers and their brokers that there is ever-increasing demand to trade U.S. options.
Critical industry participants like the OCC, OPRA and major clearing firms are also ready. In fact, these groups have supported Cboe’s proprietary index options Global Trading Hours (GTH) in much broader time windows (nearly around the clock) since the advent of GTH for those products.
We have purposely selected an equity options pre-open session that coincides with the majority of S&P 500 (SPX), mini-SPX (XSP), Cboe Volatility Index (VIX) and Russell 2000 (RUT proprietary index GTH trading volume.
The additional 15 minutes of post-RTH trading is already in place for certain ETP options. In fact, all equity options used to trade everyday until 4:10.
In short, the additional hours are being introduced in a way that is intended to maximize opportunity and minimize the burden. That said, Cboe recognizes that any expansion to trading hours will inevitably impose some amount of work and effort on industry participants. We are appreciative of these efforts and investments and see this as a necessary step to keep the vital and expanding options market aligned with customer interests and growth opportunities.
What does this move signal about the future of U.S. options markets?
It cannot be ignored that other markets are offering around the clock trading seven days per week, and securities markets are expanding hours significantly. Nonetheless, there are meaningful differences between other markets and the options markets. The growth trends and many innovations in options are clear signals of the health and stability of the industry. We’re very focused on this first phase of expanded hours and will learn from this initiative. It makes sense to start conservatively and deliberately to gain experience before consideration is given to a broader extension of trading hours. As always, we’ll take feedback from our customers and many partners as we evaluate the success of this phase of expansion.
