Three Decades of FLEX Innovation: Meet Cboe's New FLEX vs. Listed Complex Orders

Since their launch in 1993, FLEX® options have stood as a testament to Cboe’s commitment to innovation and responsiveness to customer feedback. Designed to offer customizable contract terms — such as strike price, expiration date, and exercise style — FLEX options have evolved into one of the fastest-growing segments in the U.S. listed options market.

Now, with our latest FLEX update on June 23 – FLEX vs. Listed Complex Orders – Cboe is once again redefining what’s possible in options trading.

A History of Innovation

Cboe pioneered FLEX options over three decades ago to meet the needs of institutional investors seeking greater precision than standard listed options could provide. These contracts allow for bespoke strategies while maintaining the benefits of exchange-traded products, such as central clearing and competitive price discovery.

Over the years, Cboe has continued to enhance FLEX functionality — introducing automated trading capabilities, AIM (Automated Improvement Mechanism) support, robust theoretical pricing tools and now, FLEX vs. Listed Complex Orders, allowing end users to combine FLEX options and standard listed options of the same security in a single order.

These innovations have helped FLEX options grow from a relatively niche product to a vital tool for sophisticated institutional investors. In 2024, over 200 million FLEX contracts were traded across the U.S. listed options market — up from just 12 million in 2012.

^{Credit: Cboe, *2025 numbers YTD}

While some market participants still turn to the over-the-counter (OTC) market for their bespoke options strategies, on-exchange trading offers some key advantages, namely reduced counterparty risk, capital efficiencies in the form of margining, increased regulatory oversight and more transparent pricing.

What’s Driving the Growth?

Several factors have fueled the rise in FLEX options usage:

• Defined Outcome ETFs: These funds use FLEX options to precisely tailor risk/return profiles, such as setting specific downside buffers or upside caps.
• Euroflex “Reverse/Converse” Strategies: Amid higher interest rates, this strategy has gained traction as traders look to arbitrage perceived mispricings in put (call) options.
• Institutional Demand: Banks, brokers and liquidity providers increasingly rely on FLEX options for bespoke hedging and trading strategies.

Introducing FLEX vs. Listed Complex Orders

Building on this momentum, Cboe launched a first-of-its-kind functionality: FLEX vs. Listed Complex Orders. As of June 23 on the Cboe Options Exchange, traders will be able to combine FLEX options and standard listed options of the same security in a single order. Previously, investors had to choose between FLEX and non-FLEX orders or execute multiple trades to achieve their desired exposure. This new functionality eliminates that friction, offering:

• Streamlined Execution: Combine FLEX and standard options in one seamless transaction.
• Greater Flexibility: Customize strategies without operational complexity.
• Improved Efficiency: Reduce execution time and potential slippage.

Orders that include both FLEX and non-FLEX series will be treated as FLEX orders and can be executed electronically or via open outcry. Cboe Options Exchange will be the only exchange offering this innovative order type.

Who Benefits?

While FLEX options remain primarily the domain of institutional investors, this new functionality is expected to appeal to:

• Banks and Asset Managers: Seeking precision in hedging and portfolio construction.
• Trading Floor Brokers: Looking for efficient execution of complex strategies.
• Liquidity Providers: Interested in operational efficiencies.

Cboe’s Leadership

As the original creators of FLEX options, Cboe remains at the forefront of this market’s evolution. With the power of its cutting-edge technology platform, Cboe Titanium, and deep market structure expertise, Cboe is uniquely positioned to lead the next wave of innovation in customizable options trading.

Whether you're managing risk in volatile markets or constructing defined outcome strategies, FLEX options — and now FLEX vs. Listed Complex Orders — offer the tools to trade with precision and confidence.

To learn more about FLEX options, see:

• Prior Insights post - FLEX Appeal: Enhanced FLEX Functionality on Cboe Platforms and Data
• Cboe's FLEX options home page

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