Chicago options exchange to move HQ, open new trading floor
The parent company of the former Chicago Board Options Exchange said Tuesday it will move its headquarters into the Old Post Office and will build a new trading floor in the Chicago Board of Trade Building at 141 W. Jackson.
Cboe Global Markets said it will occupy 185,000 square feet in the Old Post Office, 433 W. Van Buren, in the second half of 2020. Its new trading floor will occupy the seventh and eighth floors of the landmark building on Jackson and will mark the option exchange’s return to space it occupied in the 1970s and 1980s.
The exchange operator intends to sell its longtime home at 400 S. La Salle. Its primary business unit now goes by the name Cboe Options Exchange.
The company signed a 15-year lease, with a five-year renewal option, for the Old Post Office, where it will join companies such as Uber and Walgreens in repopulating a longvacant giant of a building now a hit with tenants seeking large and flexible floor space.
The trading floor space at 141 W. Jackson, 40,000 square feet, goes to the company on a 12-year lease. The company said it expects it will be ready in 2021.
Cboe announced its plans at a meeting with employees Tuesday morning. In material it issued about the moves, the company said that while it considered various options downtown, it never considered leaving Chicago.
“Cboe has played a critical role in making Chicago the financial derivatives capital of the world and continues to draw a community of traders, clearing firms and other market participants to the city,” Chairman Ed Tilly said.
“Relocating our headquarters to the Old Post Office reinforces our commitment to maintaining Chicago’s status as a key financial center in the global economy,” he said.
Progressives on the City Council and their supporters are advocating a financial transaction tax that would apply to Cboe and Chicago futures markets. But the tax, which would require legislative approval, is opposed by Mayor Lori Lightfoot, who has argued that the exchanges could easily avoid it by processing electronic trades via servers outside of city limits.
In an interview with the Sun-Times, Tilly said he remains concerned that a trading tax could leave one locality at a disadvantage vs. others. If such a tax were enacted here, “Cboe wouldn’t be able to call Chicago and Illinois home for very long,” he said.
But Tilly preferred to keep the focus on the company’s downtown expansion. “We want to reinvest in our home here,” he said.
The company operates a data center in Secaucus, New Jersey, and disaster recovery centers in Secaucus and Kansas City, Missouri.
In materials distributed to employees, the company said the Old Post Office “is open and light-filled with clean lines and an efficient and collaborative atmosphere. Its precision echoes the fast-paced work environment of Cboe.”
A company spokeswoman said about 350 employees will move to the new headquarters. Tilly said a small group of workers who support the trading floor will remain on-site at the new location.
The exchange’s trading pits have been downsized as its business has gone to electronic platforms, cutting into the traditional faceto-face markets known as “open outcry.” But its floor is still busy with activity tied to S&P 500 Index options and the Cboe Volatility Index options, or VIX, the stock market’s widely followed “fear gauge.”
Officials said most trading in those busy indexes is still done in the pits. What’s gone almost completely electronic is trading in options for individual stocks. The current Cboe trading floor covers 50,000 square feet, but some of the space is little used.
Moving into the CBOT Building’s 40,000 square feet will allow greater efficiency and minimal disruption for the important index options, Tilly said. He said the exchange has demonstrated its faith in open outcry by signing a long-term lease.
“I do believe there is a future for open outcry today. Of course, I’m one vote, and customers vote every day,” Tilly said.
Cboe, always a close cousin of the now combined Chicago Board of Trade and the Chicago Mercantile Exchange, was founded in 1973 in the CBOT Building. It moved to 400 S. La Salle in 1984.
Its new trading floor will occupy the same area that housed its pits from the late 1970s until that move, the company said.
In going into the 141 W. Jackson building, Cboe bypassed a chance to strike a deal with Chicago’s futures exchanges, which have their own trading floor immediately to the east.
Tilly declined to discuss that option. Cboe’s real estate adviser, Holly Duran, said in an email, “That space was, of course, one of many strategies we considered; we also provided optionality to move the trading floor to the Old Post Office. But when the availability on the 7th and 8th floor arose, it was a much clearer path.”