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SEC approves binary options on company performance metrics

SEC approves binary options on company performance metrics

Rule Changes

Cboe will list contracts on Coinbase, Nvidia, Tesla and 20 other firms; Robinhood plans to distribute them

Today: Federal Register publishes approval notice

Overview

Updated 1 hour ago

The Securities and Exchange Commission (SEC) approved Cboe's plan to list binary options tied to company performance metrics. Each contract pays a flat $1 if a reported metric clears a set threshold, and expires worthless if it does not. The payout structure mirrors prediction markets, but these trade as regulated securities options on a national exchange.

Cboe will list more than 100 metrics across 23 companies, including Coinbase trading volume, Nvidia data-center revenue, Tesla vehicle deliveries and MARA Holdings Bitcoin production. Robinhood plans to be the first retail broker to offer the contracts, with trading fees waived through the end of 2026. Trading cannot start until Cboe Clear U.S. receives its temporary clearing registration, which is still pending.

Why it matters

Investors can now bet directly on a company's reported operating numbers — revenue, production, user counts — instead of only on its share price.

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Key Indicators

23
Companies with listed metrics
Includes Coinbase, Nvidia, Tesla, Apple, MARA and SpaceX.
100+
Metrics Cboe plans to list
Operating and financial figures drawn from issuer SEC filings.
$1
Fixed payout per contract
A call pays $1 if the metric meets or beats the strike; a put pays $1 if it falls short.

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People Involved

Organizations Involved

Timeline

4 events Latest: Today
Tap a bar to jump to that date
  1. Federal Register publishes approval notice

    Today Regulatory

    The official notice details the rule change and the metrics covered; media report the plan widely.

  2. SEC approves Cboe binary KPI options rule

    Regulatory

    The commission clears Cboe to list binary options on company performance metrics across 23 issuers.

  3. SEC opens Cboe Clear amendment for comment

    Regulatory

    Public comments on the clearinghouse amendment are due October 30.

  4. Cboe Clear U.S. amends registration application

    Filing

    The clearinghouse updated its registration, a step required before the new options can trade.

Scenarios

1

Cboe launches binary KPI options after clearing registration

Likely Resolves by End of 2026

Discussed by: Cboe, which projected an October rollout; Robinhood, which plans to distribute the contracts

Cboe Clear U.S. receives its provisional registration and the products go live. Robinhood offers them to retail customers with fees waived through December 31, 2026. Trading operates within the existing options framework under exchange surveillance.

2

Binary KPI options stay a niche product

Possible Resolves by Q2 2027

Discussed by: Legal analysis of retail demand in the National Law Review

The contracts launch but attract modest volume. Retail availability depends on each broker's decision to offer them, and the all-or-nothing payout may limit appeal to casual option traders. The products remain a small slice of Cboe's activity.

3

More exchanges and metrics win approval

Possible Resolves by End of 2027

Discussed by: SEC Chair Paul Atkins, who cited a new spirit of harmonization with the CFTC

Other exchanges file similar proposals, and the SEC approves expansions to more companies and metrics. At the same time, the SEC's order leaves CFTC jurisdiction over differently structured contracts open, raising the question of how closely related event products will be regulated.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

Prior to 2026

Cboe's existing binary index options (established before 2026)

Cboe already listed binary options on broad-based indexes and its Cboe Magnificent 10 Index, giving the exchange a working framework for all-or-nothing payouts. The new approval extends that framework from market indexes to company-specific operating metrics.

Then

The exchange had a tested infrastructure for binary contracts, easing the new listing.

Now

The precedent established that binary options can trade on an exchange under securities rules, paving the way for KPI-linked versions.

Why this matters now

The new products reuse Cboe's existing binary options framework, just applied to individual company financial and operating metrics rather than index levels.

September 2024

Kalshi v. CFTC and event contracts (2024)

A federal court in Washington ruled that Kalshi could list event contracts on which party would control Congress, over CFTC objections. The decision opened the door to regulated exchange trading of prediction-market-style contracts on real-world outcomes.

Then

Kalshi listed the congressional control contracts and event-based trading reached a wider retail audience.

Now

The ruling normalized event contracts as exchange-traded products and put pressure on both the CFTC and SEC to clarify how such products fit within existing frameworks.

Why this matters now

Binary KPI options are the securities-market counterpart to CFTC-supervised event contracts, giving investors a regulated way to bet on specific corporate outcomes.

Sources

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