How Do Exchanges Decide Which Derivatives Are Standardized Enough to Be Listed on a CLOB?

Exchanges decide to list a standardized derivative on a CLOB based on anticipated customer demand and the potential for sufficient liquidity. They conduct market research to identify a common hedging or speculative need that can be met with a fungible contract.

The underlying asset must have a reliable and transparent price. The exchange then designs the contract with standardized terms (size, expiration, etc.) that are simple enough to attract a broad range of market participants, from institutions to retail traders, ensuring a deep and active order book can be sustained.