Cboe FLEX options set Q3 record as open interest reaches roughly 71 million contracts

Cboe says trading in customisable FLEX options reached a record 2.33 million contracts per day in the third quarter of 2026, while outstanding positions finished the period above 71 million contracts. The latter figure represented nearly 11% of the overall options market by the exchange's measure. FLEX contracts permit eligible parties to set contract features that differ from standard listed expirations or exercise conventions, subject to the relevant product and market rules.[1][2]

The immediate industry story is not simply more options trades. The demand profile has changed. Cboe says European-style exercise, which generally permits exercise at expiration rather than at any point beforehand, has accounted for well over 90% of FLEX activity since 2021. Defined-outcome exchange-traded funds are an important source of repeated roll activity because they often use option combinations designed around specified payoff windows.[1][2]

Daily trading versus outstanding exposure

Open interest tells a related but distinct story. Cboe's published charts indicate that FLEX open interest was roughly 38 million contracts in the third quarter of 2025 and about 71 million a year later. The implied gain is roughly 87% using those rounded endpoints. The figure is not a precise year-on-year audited growth rate because both inputs are approximate values inferred from the exchange's presentation.[1][2]

The single-stock segment accounts for about two-thirds of the reported total open interest. This concentration gives the proposed next regulatory change commercial importance: Cboe has discussed allowing cash settlement for certain sufficiently liquid single-stock FLEX options. At present the exchange characterises that permission as a pending filing, not an adopted universal capability. Listed products, OTC contracts and customisable exchange-cleared contracts have different settlement and margin implications.[1][2]

Why the next rule change is important

Liquidity providers face a different operational challenge from the growth of a standard, continuously quoted contract. On a quarterly roll date, hundreds of multi-leg packages can require pricing in a concentrated window. Cboe describes increasing automation in requests for quotes and risk management as part of the market's response. That is plausible infrastructure pressure, although the release does not isolate how much extra trading can be attributed to each automation change.[1][2]

The key distinction for brokers is between daily trading activity and the stock of outstanding positions. High open interest creates ongoing margin and corporate-action obligations; turnover measures trading flow. Neither number directly proves low client execution costs. A fuller market-quality assessment would compare quotes, depth and slippage for matched FLEX structures as the product set expands.[1][2]

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