Core Viewpoint - Cboe Europe Derivatives plans to launch Flexible Exchange® (FLEX) options in Europe in Q1 2026, allowing investors to customize options contracts to meet specific risk management needs, addressing the demand for sophisticated strategies in volatile markets [1][4]. Group 1: FLEX Options Features - FLEX options enable customization of key contract terms such as strike prices, expiration dates, settlement types, and exercise styles within a regulated exchange environment, combining OTC adaptability with exchange transparency [2]. - The introduction of FLEX options is expected to support the growth of defined-outcome ETFs in Europe, which have seen significant growth in the U.S. from $5 billion in 2019 to over $70 billion in 2025 [3]. Group 2: Market Positioning and Infrastructure - Cboe has a history of FLEX options in the U.S. since 1993, with open interest growing from 2 million in 2019 to 35 million in 2025, indicating strong institutional demand for customizable hedging solutions [5]. - Contracts will be cleared through Cboe Clear Europe, enhancing capital efficiency and reducing counterparty risk, appealing to asset managers and ETF issuers [6]. Group 3: Impact on ETFs and Issuers - The adoption of FLEX options is linked to the expansion of defined-outcome ETFs, with support from experienced issuers like First Trust Global Portfolios and Vest Financial, indicating a strong interest in deploying similar products in Europe [9][10]. - ETF issuers view FLEX options as foundational for developing defined-outcome products, enabling European investors to access U.S.-style strategies locally [11]. Group 4: Integration into European Derivatives Market - The launch of FLEX options aligns with CEDX's mission to enhance participation in Europe's derivatives markets by offering innovative exchange-traded products, potentially attracting asset managers looking to replicate U.S. product structures [12]. - FLEX options provide institutional investors with a crucial risk management tool amid rising market complexity, potentially reducing reliance on OTC trades and simplifying oversight [13]. Group 5: Future Outlook - The expansion of FLEX options across additional underlyings in 2026 could lead to strong growth in defined-outcome strategies in Europe, supported by a robust menu of exchange-traded building blocks [14]. - The introduction of FLEX contracts may shift demand from OTC to exchange-traded solutions, enhancing investor choice and market transparency [15].