On this episode of The Derivative, Jeff Malec continues Chicago Month with a deep dive into the past, present, and future of derivatives and volatility at Cboe with two of its stars.
First up, Cboe Global Head of Derivatives Rob Hocking traces Chicago’s rise as the world’s derivatives hub, from the Board of Trade’s agricultural hedging roots to SPX and VIX becoming the center of global risk transfer. Rob walks through life in the OEX and SPX pits, the culture of open outcry, the evolution from Hull and DRW to “the dark side” at the exchange, and how today’s liquidity, zero‑DTE flows, and concentrated market‑making still hold up under stress. He and Jeff dig into whether the derivative can ever outgrow the underlying, why S&P 500 remains the benchmark despite megacap concentration and global basis risk, and how Cboe balances the floor’s high‑touch block business with a mostly electronic market.
Then Mandy Xu, Head of Derivatives Market Intelligence at Cboe, joins to break down the current volatility regime. She explains what VIX really measures (and why “fear gauge” is often wrong), how Cboe decomposes VIX into bullish vs bearish positioning, and why today’s record call‑chasing and low skew feel uncomfortably close to meme‑stock and late‑’90s territory. Mandy covers the rise of zero‑DTE, option‑income and buffered ETFs, the breakdown of stock–bond correlation, the AI‑driven dispersion trade, and whether vol selling is truly “artificially” suppressing risk. The trio also find time for some Chicago vs New York banter—pizza, skylines, seasons, and sports—and a look at what’s next from Cboe, from binaries on XSP to trading KPI‑style “valuation chain” products tied to names like Tesla and Cboe itself.
00:00-01:43=Intro
01:44–05:36 = From Corn Contracts to Options Hub
05:37–20:42 = Pit Sheets to $5 Trillion a Day: Inside the S&P Options Machine
20:43–30:29 = Game Within the Game
30:30–35:36 = Big Blocks, Complex Trades, and the Future Beyond VIX38:07-42:15 = Pork Chops at Soldier Field
42:16–51:09 = Retail Flows and the New Vol Regime
51:10–1:02:57 = Is VIX Still the Fear Gauge? What’s Really Driving Risk
1:02:58-1:07:18 = AI Winners, Dispersion, and the 60/40 Shift1:07:19-1:13:16 = Building Better Hedges
1:13:16-1:17:34 = Chicago vs. New York: Pizza, Seasons, Sports, & Final Whistle
From the Episode:How Futures saved Stocks
RCM VIX Whitepaper
Blog Post - VIXmaggaeddon
Follow along with Rob Hocking, Mandy Xu, and the Cboe on LinkedIn and be sure to visit cboe.com for more information!
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Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visitwww.rcmalternatives.com/disclaimer
