What does the CBOE primarily regulate?

The Chicago Board Options Exchange (CBOE) primarily regulates standardized options. This is significant because the CBOE was established to create a marketplace specifically for options trading, making it a leading exchange in the options market. Standardized options are contracts with specific terms—such as the size of the options contract, expiration dates, and strike prices—that are predetermined, facilitating trading and ensuring liquidity.

By focusing on standardized options, the CBOE plays a crucial role in the options market's efficiency, allowing for clear guidelines and practices that enhance transparency and investor confidence. Additionally, because standardized options are widely used by traders to hedge risks or speculate, the CBOE's regulatory framework helps maintain orderly trading conditions and protects market participants.

The regulation of state municipal securities, investment banking, and securities trading violations falls outside the CBOE's primary mandate, as those areas are overseen by other regulatory bodies or exchanges that specialize in different aspects of the securities industry. This distinction highlights the CBOE's unique position and specialization in the area of options trading.