Cboe Gets Fast Approval to Trade Yes-or-No Bets on Corporate Metrics
Published Date: 10/16/2026
Notice
Summary
The Cboe Exchange got the green light to list new binary options based on key performance numbers from certain companies. This means investors can now bet on simple yes-or-no outcomes tied to how well these companies do, starting right away. It’s a fresh way to trade that could shake up the market and offer new chances to make money.
Analyzed Economic Effects
8 provisions identified: 3 benefits, 3 costs, 2 mixed.
Exchange may list binary KPI options
The Cboe Exchange is permitted to list and trade new binary options whose payout depends on whether a company's reported key performance indicator (KPI) meets a preset strike. The rule authorizes listing these "binary KPI options" on specified KPIs and issuers and was approved on an accelerated basis (filing amended October 1, 2026; approval referenced October 13, 2026).
Settlement uses issuer filings and is final after expiration
Settlement value for binary KPI options is the KPI value as disclosed in the issuer's earnings-related filing submitted to the SEC (Form 8-K, 10-Q, or 10-K) on the option's expiration date. If the KPI is later restated after settlement, the settlement value and any payment do not change.
Alternate settlement if KPI missing or not reported
If the applicable KPI is not reported or is unavailable on the expiration date, settlement will follow the Clearing Corporation's alternative procedures. That may mean expiring contracts are exercised and settle at the last closing price of the binary KPI option (a value between $0.01 and $1.00) or, if a closing price is unavailable or unreliable, the exercise criterion will be deemed not met and options will expire worthless.
25,000-contract position limit and market-maker exemption
Amendment No. 1 specifies a 25,000-contract position limit for binary KPI options. The filing also states a proposed position-limit exemption would be available only to registered market-makers.
Fixed $1 all-or-nothing payout per contract
Each binary KPI option has an exercise settlement amount set at $1 (unless adjusted by Exchange or Clearing Corporation rules), so payout at expiration is an all-or-nothing cash amount tied to whether the KPI meets the strike. The contract style is European (exercisable only on expiration).
Expiration timing, AM/PM settlement, and listing window
Binary KPI options may be listed to expire up to 12 months from listing and the Exchange may list up to two expirations at one time per KPI per issuer. A series may be opened at least one business week before expiration. Options are designated A.M.-settled or P.M.-settled depending on whether the issuer discloses earnings before the market open or after the market close, and exercise is European-style (exercisable only on expiration).
Strike scaling, intervals, and at-the-money rules
The Exchange will scale KPI strike prices by tiers (divide by 1,000; 1,000,000; 1,000,000,000; or 1,000,000,000,000) depending on the KPI's most recent disclosed value, and will apply minimum strike intervals of 0.01 (<10), 0.10 (10–99.99), 1.00 (100–999.99), 10.00 (1,000–9,999.99), and 100.00 (>=10,000). The Exchange will set initial strikes based on an at-the-money KPI value drawn from the most recent filing, issuer estimate, or analysts' consensus, and requires listed strikes be "reasonably close": for KPIs <=1 within 2; >1 to <=10 within 100% above/below; >10 within 30% above/below (with exceptions for demonstrated customer interest).
Specific issuers and KPIs enumerated for listing
The filing lists specific issuers and the KPIs on which binary KPI options may be listed, including companies such as Apple, Amazon, Microsoft, NVIDIA, Tesla, JPMorgan Chase, Bank of America, Meta, Netflix, and others, with named KPIs (for example, "Earnings per Share: Diluted", "Revenue", "Net Income", and many company-specific metrics).
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