Cboe is examining whether perpetual futures could be introduced for the VIX, the index widely known as Wall Street’s “fear gauge,” according to reporting by CoinDesk citing Bloomberg. The idea remains at an early stage: no contract specifications have been published and no regulatory filing has been made.
Why the VIX matters
The VIX measures the market’s expected 30-day volatility for the S&P 500 using options prices. It often rises when investors buy options to protect against sharp declines in equities, making it a closely watched indicator of anxiety in the stock market.
The index is not a security or a directly tradable asset in the same way as a company’s shares or bitcoin. Instead, it is a mathematical calculation derived from options pricing. Even so, it supports a substantial derivatives ecosystem that already includes futures, options and exchange-traded products linked to its movements.
A new perpetual contract would seek to give traders another way to take positions on expected volatility without holding a contract that reaches a fixed expiration date.
How perpetual futures differ
Traditional futures have an expiry date. When a contract approaches that date, traders who want to maintain exposure generally need to close the existing position and move into a later contract, a process known as rolling. The cost of repeatedly rolling contracts can reduce returns and has been a criticism of some futures-based investment products, including bitcoin futures exchange-traded funds when they launched in late 2021.
Perpetual futures, also called perpetual swaps, do not expire. Crypto markets have made extensive use of the structure. Instead of settling through expiration, these contracts use periodic funding payments intended to keep the contract price aligned with the underlying reference price or index.
For a VIX perpetual, the funding mechanism would theoretically provide a way to keep the contract connected to the index while allowing traders to focus on whether expected volatility will rise or fall. Martin Lee, market insights lead at DWF Labs, told CoinDesk that removing expiry and decay could make the direction of the underlying the central focus for traders. He also said he expected more indexes, assets and metrics to be adapted into perpetual products in the coming months.
Potential benefits and unresolved risks
A VIX perpetual could broaden access to volatility trading and bring additional buyers and sellers into the market. Greater participation could also give market makers more opportunities to hedge positions across VIX futures and other S&P 500 derivatives. That, in turn, might help different VIX-linked products trade more closely in line with one another.
But eliminating expiration would not eliminate trading costs or risk. Users would still face funding payments, which can vary depending on the balance between long and short positions. The absence of an expiry date also does not automatically solve the challenge of hedging an instrument whose underlying reference is an index rather than a cash asset.
Market makers can hedge bitcoin derivatives by buying or selling bitcoin in the spot market. The VIX itself cannot be bought and sold as a physical asset, making it harder to offset exposure in the same direct way. Marex Solutions analysts described this as a key issue, saying the central question is how funding would anchor an index that cannot be purchased as a cash asset. They added that removing expiry does not remove hedge costs or basis risk, and that the product should not be viewed as a cheaper replacement for the convexity provided by options.
Early signs of convergence
Some crypto exchanges already list VIX-linked perpetual contracts. Gate offers VIX/USDT perpetuals, although the source material describes that market as highly illiquid and with little noticeable volume. Hyperliquid has also recently listed futures linked to bitcoin’s VIX, the implied-volatility index developed by Volmex.
Those existing products provide examples of how crypto-market structures could be applied to traditional volatility benchmarks, but they do not establish that Cboe’s proposal will launch. The exchange has not yet announced contract terms, and the idea remains under consideration.
If developed, a Cboe VIX perpetual would represent another point of contact between traditional and crypto market design. The proposal shows growing interest in applying a trading format popularized by crypto to a major measure of equity-market volatility, while also highlighting the practical difficulties of creating reliable markets around indexes that cannot be directly bought or sold.