Cboe has filed with the Securities and Exchange Commission to list binary options linked to corporate key performance indicators. The products would let traders take positions on company earnings results.
The proposed contracts would pay $1 if a disclosed metric meets a preset threshold. A contract linked to Apple iPhone sales, for example, would settle at $1 if the reported figure reaches or exceeds the listed level. The opposing contract would pay if the result is lower.
Contracts would cover company KPIs
Cboe’s filing covers financial and operating metrics reported in earnings-related SEC filings, including Forms 8-K, 10-Q and 10-K. The exchange would set the KPI, reporting period and threshold for each contract series.
The first group includes Apple, Nvidia, Tesla, Microsoft, Meta, Amazon, Alphabet, Netflix, Coinbase, Robinhood, JPMorgan Chase, Disney and SpaceX. Proposed measures include Nvidia data-center revenue, Tesla Model 3 and Model Y production, Apple services revenue, Coinbase trading volume and Disney sports segment operating income.
Contracts would settle when the company releases the relevant earnings result. Companies reporting before the market opens would use A.M.-settled contracts, while results published after the close would use P.M.-settled products. Cboe could list contracts up to 12 months before settlement. Trading would begin at least one business week before expiry.
Cboe uses securities options rules
The exchange has filed the product as a securities option, rather than a swap or commodity-based event contract. Cboe said company KPIs can affect a company’s share price. It said the contracts should therefore fall under SEC options rules. The contracts would follow securities market rules. Those rules cover market surveillance, insider trading and the use of material nonpublic information.
Cboe has also proposed position limits based on each company’s stock-option limit, with 100 KPI binary options treated as one standard options contract. Settlement would use the KPI figure reported in the issuer’s relevant SEC filing. A later restatement would not change the final result for expired contracts.
The filing follows Cboe’s June launch of binary options tied to the Mini-S&P 500 Index under its Cboe Predicts range. Those products trade as listed securities options, unlike event contracts offered through Commodity Futures Trading Commission-regulated platforms such as Kalshi. SEC approval is required before Cboe can list the company KPI contracts. The proposal would bring earnings-linked prediction trading into the listed options market.
