In a major move to empower retail investors, Cboe Global Markets, Inc. (CBOE) has announced a partnership with Robinhood Markets, Inc. (HOOD). This collaboration will provide Robinhood customers with access to index options, greatly expanding their trading capabilities. The move comes at a time when retail investor participation in the market is booming, with individuals increasingly seeking sophisticated tools to manage their investments.
During the HOOD Summit 2024, Benzinga’s Zunaid Suleman sat down with Cboe’s Global President Dave Howson to discuss the partnership. Howson emphasized the significant growth of retail investors and the expansion of their knowledge and skills in the years leading up to and following the COVID-19 pandemic. He noted that retail investors are eager for more advanced market tools to enhance their strategies.
“When you look at the last five years, the growth and utilization of retail participants in options trading has been absolutely tremendous,” Howson told Benzinga.
Robinhood customers will soon be able to trade Cboe’s index options on the S&P 500, Cboe Volatility, Russell 2000 and Mini S&P 500 indexes. These index options are part of Cboe’s Volatility Toolkit, designed to help traders navigate different market cycles and volatility regimes.
“The ability to manage risk, deploy different trading strategies and hedging strategies, generate income, and execute systematic trading strategies is tremendously important,” Howson stated.
Recognizing the importance of investor education, Cboe offers several educational tools to expand investor knowledge and skill sets. Cboe’s Options Institute provides free online courses, webinars, interactive tutorials, and insights from market experts and academics. These resources are designed to help retail traders understand index options and navigate the complexities of these new products.
“It’s about helping with education, helping with learning what these products can actually do for a customer to help manage volatility and risk in their portfolio,” Howson explained.
The partnership between Cboe and Robinhood represents a significant step in expanding access to advanced trading tools for retail investors. It also highlights the growing demand for educational resources to empower investors to navigate the complexities of the options market and leverage its potential for managing risk and generating returns.