SEC Okays Betting on Politics with Fancy Event Contracts?
Published Date: 8/27/2026
Notice
Summary
MEMX is planning to let people trade new types of contracts called securities event contracts on its options platform. This change will affect traders who want to bet on or hedge risks tied to specific events, like political or economic outcomes. The new rules are up for review now, and if approved, trading could start soon, opening fresh ways to invest and manage money.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 1 costs, 1 mixed.
Exchange Lists Binary Issuer Contracts
MEMX proposes to list and trade new "securities event contracts" — cash-settled, European-style binary options tied to issuer financial events — on its options platform. These contracts would be cleared through a registered clearing agency and trade within MEMX's existing options regulatory framework.
Initial Listings Limited to Top 25 Issuers
For initial listings, MEMX may select NMS stocks of no more than 25 issuers under a top-25 objective test (ranked by market capitalization, equities volume, or options volume). MEMX may also list securities event contracts on any issuer that already has similar contracts approved on another exchange.
Standard $1 Payout, No Multiplier
MEMX's default for securities event contracts is an exercise settlement amount of $1 and the contracts would not have a contract multiplier. The Exchange may specify a different amount where appropriate, but $1 is the intended standard.
Trading Mechanics: Paired Bids and Payment
To enter a position you must bid to buy either the yes contract or the no contract and pair that bid with a contraside bid; acceptable bid prices range from $0.01 to $0.99 with $0.01 minimum increments, and a transaction executes when the paired bids sum to $1. The Exchange will not accept offers to sell, and positions must be paid in full when entered under the Clearing Corporation's rules.
Expiration, Resolution, and Finality Rules
MEMX would list series that expire from one day up to 12 months after listing, and contracts based on an underlying financial metric expire on the date that metric is first publicly announced in a definitive resolution source (e.g., Form 8-K, Form 10-Q, or Form 10-K). If the issuer reports after the close of trading, the last trading day is the day of expiration; if the issuer reports before the open, the last trading day is the trading day before expiration. If a metric is restated after settlement, the settlement amount will not change.
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