Cboe Secures Approval for Prediction Market Options Tied to Major Companies

Key Points

The SEC approved a rule change allowing Cboe Global Markets to list and trade binary options tied to key performance indicators reported by public companies.

How the KPI Contracts Work

Think of these contracts as a yes-or-no question with money attached. Will a company's reported metric land at or above a set threshold? If yes, the contract pays $1. If no, it pays $0.

Initial Lineup

The initial lineup covers more than 100 metrics across 23 companies. Coinbase, Nvidia, Tesla, and Apple are among the names on the list.

Distribution and Waivers

Robinhood Markets will be the first retail broker to distribute the contracts. Both Cboe and Robinhood plan to waive fees on the products until December 31, 2026.

Regulatory Review

Cboe Clear U.S. is still waiting on its temporary registration to handle clearing, so the contracts are approved but not live.

Market Reaction

The market's first reaction was split. Cboe shares rose more than 4% after the announcement, while Robinhood shares fell nearly 9%.

Crypto Angle

Coinbase's trading volume is one of the metrics on offer, effectively turning a key gauge of crypto market activity into a tradable yes-or-no question.