Cboe Targets November Launch of SEC-Approved KPI Contracts

Cboe Global Markets has received U.S. Securities and Exchange Commission approval to list and clear securities-based key performance indicator (KPI) contracts — binary event contracts referencing company-specific metrics — on 23 companies, and chief executive Craig Donohue said on the third-quarter results call of 30 October that he anticipates a November launch. Cboe filed both the listing and clearing applications in late June, and Donohue framed the approval as the first step in a broader event contract strategy.

The filing timeline matters for desks watching rivals. MEMX, NYSE and Nasdaq have all submitted filings to launch KPI contracts, according to Rob Hocking, global head of derivatives at Cboe, who argued the exchange holds a first-mover advantage.

What does the SEC approval change?

Donohue drew a sharp regulatory line. Event contracts based on securities indices or on corporate performance metrics that issuers disclose as material to reported financial or operating results — earnings and revenue, for example — meet the definition of a security and fall squarely within SEC jurisdiction, he said.

"What a platform chooses to call a product does not change that," Donohue said. "Allowing these products to trade outside securities laws risks creating a shadow market where investors take on securities risk without the registration, disclosure, and market integrity protections the law requires."

Cboe built its products as securities so investors benefit from safeguards against manipulation and insider trading. Donohue also argued that filings and self-certifications behind event contracts should be public, without large portions unavailable for review, so market participants can assess risk.

"The success of prediction markets will depend on both innovation and investor confidence," he said.

Hocking contrasted Cboe's SEC-regulated products with platforms offering CFTC-regulated KPI contracts, saying Cboe's trade on a registered exchange under securities law with insider trading protections. "That is going to be very important for brokers and institutions to adopt," he added. He expects the KPI binary options to develop into a multi-listed market over time, which he called a "good thing."

How will the contracts clear?

The KPI contracts will be cleared by Cboe Clear U.S., LLC (CCUS), which holds temporary SEC registration as a Covered Clearing Agency — an authorization that expands its authority beyond the futures and swaps it clears as a CFTC-registered derivatives clearing organization. CCUS also recently received CFTC approval to clear a broad range of margined futures products and continues to clear digital asset derivatives.

"I just want to remind everyone that we are introducing a second securities clearinghouse for the first time in over 53 years, so that's taking some time to make sure everyone is connected and ready to trade," Hocking said.

The November launch remains pending readiness of clearing members, brokers and market makers. On pricing, Hocking said fees will be waived through the end of 2026. "Right now the priority is adoption, not really revenue," he added. He expects volume to evolve as zero days to expiry (0DTE) options did — retail first, institutions later, with early institutional demand likely from hedge funds. Cboe "would be open" to providing post-trade clearing services to the wider market.

Distribution is already taking shape. Cboe named Robinhood as launch partner in September, with strong interest and support from Interactive Brokers and Schwab. "Distribution breadth is an advantage that a closed, vertically integrated system cannot match, and we believe it is why our KPI contracts are well positioned to scale," Donohue said.

Donohue paired the KPI approval with a second foundational step: a 25-year extension of Cboe's exclusive S&P Dow Jones Indices licensing agreement, which began in 1983 and now runs through 2051 — the longest in the relationship's four-decade history. Collaboration will pursue new products including exchange-traded, centrally cleared tokenized options contracts.

What did the third-quarter numbers show?

Net revenue reached $712.2m, up 18% year on year, with double-digit net revenue growth in every major category and growth in four of five segments.

• Derivatives net revenue rose 22%, driven by a 24% increase in index options average daily volume on record 0DTE activity.
• 0DTE contracts hit a record 65% of overall Cboe S&P 500 Index (SPX) options volume; retail 0DTE volume jumped 46% year over year against institutional growth of 20%.
• XSP total volume more than doubled versus Q3 2025, driven largely by retail after the June repeal of the Pattern Day Trader Rule, which had limited active traders with accounts under $25,000.
• Global trading hours (a near-24/5 extended session) averaged nearly 250,000 contracts per day, with session volume up 130%, led by Asia at over 30% of volume, up from under 20% a year ago.
• Cash and spot markets net revenue grew 12% to $131m.

Cboe also launched extended hours for options on 24 single stocks and five ETFs on 19 October 2026, with pre-market trading from 7:30 a.m. Eastern, capturing 63% of morning volume in the first week. Its first Cboe Predicts product — binary options on the mini S&P 500 — launched in June, with adoption expected to accelerate as broker-dealers roll out point-and-click interfaces.

What happens next?

Chief financial officer Jill Griebenow said the sale of Cboe Australia to TMX closed in the quarter for a net gain of $71.5m, while the Cboe Canada sale remains pending regulatory approval. Capital will be deployed deliberately behind KPIs, clearing and extended hours, she said, and Cboe raised its 2026 organic net revenue growth target to "high teens" from "mid to high teens," with the Data Vantage target lifted to "mid teens." Cash equities extend to 23x5 in December, pending industry readiness, with tokenized solutions under exploration on the path to 24x7 — leaving Cboe to test whether securities-law protections and fee waivers can convert a first-mover launch into scaled adoption.