In an era defined by macroeconomic uncertainty and digital transformation, credit futures are revolutionizing how investors manage risk and access liquidity. Cboe® Credit Index Futures were designed to mirror the liquidity and structure of popular credit ETFs and have seen record adoption in recent years. This growth reflects a broader transformation in how investors manage credit exposure, hedge risk and optimize capital allocation.
The Evolution of the Corporate Bond Market
The corporate bond market has undergone a dramatic shift since the Global Financial Crisis. Electronification, increased data transparency and the rise of systematic investment strategies have reshaped the fixed income ecosystem. The proliferation of fixed income ETFs — particularly the iShares® iBoxx® $ High Yield Corporate Bond ETF (HYG) and the iShares® iBoxx® $ Investment Grade Corporate Bond ETF (LQD) — has been central to this evolution. These ETFs are hubs for price discovery and risk transfer, catalyzed by the SEC’s 2019 “ETF Rule” (Rule 6c-11), which standardized the use of custom baskets in ETF creation and redemption. This regulatory milestone unlocked liquidity across thousands of bonds, enabling more seamless portfolio trading and laying the groundwork for the development of credit futures. Cboe’s Credit Index Futures — IBHY ( Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index Futures) and IBIG (Cboe® iBoxx® iShares® $ Investment Grade Corporate Bond Index Futures ) — were intentionally designed to align with these ETFs, using a unique index construction methodology that intersects benchmark indices with actual ETF holdings. This alignment helps to facilitate efficient arbitrage, hedging and access to deep liquidity pools.
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