Cboe Wants Binary Options on Company Performance KPIs
Published Date: 7/15/2026
Notice
Summary
Cboe Exchange wants to let people trade new binary options based on key performance indicators (KPIs) reported by some companies. This change affects investors who like quick, yes-or-no bets on company performance and could open fresh ways to invest starting soon after approval. It’s a cool new twist that might shake up how folks bet on business success!
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
Settlement Uses KPI in SEC Filing; Final Even if Restated
A binary KPI option’s settlement value will be the KPI value as disclosed in the issuer’s Form 8-K, Form 10-Q, or Form 10-K on the applicable expiration date. If the issuer later restates that KPI after expiration and settlement, the settled amount will not change.
If KPI Missing, Alternative Settlement May Be Less Than $1
If the applicable KPI is not reported or otherwise unavailable on the expiration date, settlement will follow the Clearing Corporation’s alternative procedures and may use the last closing price of the binary KPI option. That alternative exercise settlement amount can be less than the standard $1 payout (for example, $0.76 in the filing).
Expiration Dates Follow Issuer Earnings Release Timing
A binary KPI option’s expiration date will be the date an issuer discloses the applicable KPI in its earnings results, and the Exchange will designate series as A.M.-settled or P.M.-settled depending on whether the issuer reports before the open or after the close of Regular Trading Hours. The Exchange may list expiration placeholders and may list expirations up to 12 months from listing, with up to two expirations at one time per KPI.
Exchange May List Binary KPI Options
Cboe filed to allow listing and trading of new binary options that settle based on a company’s reported key performance indicators (KPIs). The filing was submitted on June 30, 2026 and seeks to create European-style, cash-settled "binary KPI options" where payout is all-or-nothing at expiration.
Strike Scaling and Minimum Intervals Defined
Exercise prices (strikes) for binary KPI options will be scaled based on the issuer’s most recent KPI (tiers: >=1 trillion, >=1 billion, >=1 million, >=1 thousand, and <1, with corresponding divisors). Minimum strike intervals are set (0.01 for strikes <10; 0.10 for 10–<100; 1.00 for 100–<1,000; 10.00 for 1,000–<10,000; 100.00 for >=10,000). The Exchange will change scaling only after the KPI is in a different tier for four consecutive reporting periods (or as needed for fair markets).
Listing Initially Limited to Specific Issuers and KPIs
The Exchange listed explicit issuers and specific KPIs that may underlie binary KPI options, including companies such as Apple, Amazon, Microsoft, NVIDIA, Tesla, Alphabet, and others, with named KPIs (e.g., diluted earnings per share, revenue, segment net sales). The Exchange may approve listing those KPI-based binary option classes for trading.
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