Cboe Global Markets Inc. has submitted a request to the U.S. Securities and Exchange Commission (SEC) to launch a novel type of binary options that are tied to corporate performance metrics rather than fluctuations in stock prices, as reported by Bloomberg.
The proposed product, termed 'binary KPI options,' will enable traders to adopt an all-or-nothing stance on whether a company meets or falls short of a specific financial or operational benchmark.
Should the SEC grant approval, these contracts would be settled based on the actual outcomes of the selected metrics instead of movements in the company's stock price.
These new options would be similar to the yes-or-no contracts currently found on prediction market platforms. However, Cboe's offerings would function within the SEC's regulatory framework, given that it operates as a securities exchange, in contrast to prediction market platforms like Kalshi and Polymarket, which are governed by the Commodity Futures Trading Commission.
The SEC filing encompasses over 100 potential performance indicators from 23 different companies. Among the metrics highlighted in the proposal are Apple's iPhone sales, trading volumes for Coinbase Global, production figures for Tesla's Model 3 and Model Y, revenue from SpaceX, data-center sales by Nvidia, and credit-loss provisions from JPMorgan Chase.
This proposal comes at a time when exchange operators are actively rolling out contracts aimed at offering traders more tools for managing their exposure while vying for retail participation in event-driven markets.
Cboe has recently reintroduced binary options linked to whether the S&P 500 reaches a specified threshold, reviving a product that had been dormant for over a decade.
Other exchanges are also broadening their similar offerings. Nasdaq Inc. has already secured regulatory approval for binary index options, with trading expected to commence later this year. Meanwhile, Intercontinental Exchange Inc., the parent company of the New York Stock Exchange, is launching new futures contracts related to global monetary policy decisions and U.S. natural gas storage levels.
If the SEC approves Cboe's binary KPI options, it would broaden event-based trading beyond just economic indicators and market indexes, allowing participants to take positions based on specific corporate earnings metrics reported during quarterly financial disclosures.