Cboe has published an analysis that takes direct aim at a common misconception in the derivatives world: that perpetual futures and zero-days-to-expiry (0DTE) options are essentially interchangeable. The exchange operator argues that the two products carry different risks, serve different purposes, and shouldn't be lumped together by regulators.
Why the Myth Persists
Both instruments are short-dated, allow leverage, and have exploded in popularity among retail and institutional traders. That surface similarity has led some market participants and even policymakers to treat them as near-identical. But Cboe's analysis contends that the comparison falls apart once you look at how each product actually behaves.
Perpetual futures, as the name suggests, don't have an expiration date. Traders can hold them indefinitely, paying or receiving funding payments depending on market conditions. 0DTE options, on the other hand, expire at the end of the trading day. That single difference cascades into very different risk profiles.
Different Risks, Different Applications
The analysis highlights that perpetual futures expose traders to ongoing funding rate risk and the possibility of forced liquidation if positions move against them. Because they never expire, losses can accumulate over time. 0DTE options, by contrast, have a hard stop: they either pay off by the close or become worthless. The risk is concentrated in a few hours, but it's capped at the premium paid.
Applications also diverge. Perpetual futures are often used for longer-term directional bets or as a way to gain leveraged exposure to an asset without rolling contracts. 0DTE options are typically tools for intraday speculation, hedging a specific event, or expressing a view on volatility within a single session. Cboe's analysis argues that conflating the two leads to a misunderstanding of where risk actually sits.
Regulatory Implications
The core of Cboe's argument is that these differences demand distinct regulatory treatment. A one-size-fits-all approach—whether that means position limits, margin requirements, or surveillance—could miss the point for either product. The analysis stresses that rules designed for one may be ill-suited to the other, potentially creating gaps or unnecessary constraints.
Cboe isn't proposing specific new rules in this piece. Instead, it's laying out a framework for thinking about the two instruments separately. The message to regulators is clear: before writing rules that sweep both into the same bucket, look at how each one actually functions.
What the Analysis Doesn't Say
The document stops short of calling for any particular policy change. It doesn't claim one product is riskier than the other, and it doesn't take a position on whether either should be restricted. What it does do is push back on the idea that they're interchangeable—a notion that has gained traction as both have seen record volumes.
For traders and risk managers, the takeaway is practical: know which instrument you're holding and what happens to it when the session ends. For regulators, the question is whether current frameworks adequately capture the distinct dynamics of perpetual futures versus 0DTE options.
The analysis lands at a time when both products are under increased scrutiny from policymakers. Whether that scrutiny translates into separate rulemaking remains to be seen—but Cboe has made its position clear: treat them differently, because they are different.
