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Cboe chief touts options safety as perpetual futures divide exchanges

By Reuters News

By Pritam Biswas

Oct 30 (Reuters) - Cboe Global Markets CBOE.Z CEO Craig Donohue on Friday cautioned investors about the risks of perpetual futures, noting that the sudden liquidations and unbounded losses triggered by sharp volatility underscored the relative safety of traditional options.

Donohue pointed to a surge in call-option trading tied to Cboe's Volatility Index earlier this month, when daily volume reached its highest level in more than two years. He said the spike topped levels seen during the 2025 Liberation Day sell-off, when the VIX climbed above 50, levels associated with market panic.

"The rapidly changing market backdrop is a good reminder of why options remain the tool of choice for most investors," Donohue told analysts on the company's third-quarter earnings call.

EXCHANGES DIVIDED OVER PERPS

The comments point to a growing split among major US exchanges over the rise of perpetual futures.

First popularized by offshore crypto platforms such as Hyperliquid, the contracts allow traders to hold positions indefinitely without rolling them over. They can also involve high leverage, magnifying both gains and losses.

Newer venues, including cryptocurrency exchange Coinbase COIN.O and prediction-market startup Kalshi, are seeking to bring similar products into traditional markets. Executives at established exchanges have warned that the contracts could leave investors vulnerable in fast-moving markets.

Donohue said linear products such as perpetuals can offer leverage and directional exposure, but losses can be open-ended. If markets turn sharply, positions can be liquidated almost instantly. Options, by contrast, let traders define their maximum loss upfront while preserving upside exposure.

That skepticism is shared at CME Group, where CEO Terry Duffy has repeatedly criticized regulators for allowing perpetual cryptocurrency futures into US markets. Duffy, who is set to retire in 2027, called perps "a disaster waiting to happen" earlier this year.

Cboe's profit beat on Friday rounded off a positive quarter for US exchanges.

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