- The SEC approved Cboe binary options tied to company metrics, letting traders take yes-or-no positions on specified performance figures.
- Approved metrics include Coinbase trading volume, MARA Bitcoin production, and Robinhood customer and revenue figures.
- The contracts must follow securities-market safeguards, while the SEC’s approval leaves potential CFTC jurisdiction over other structures.
The U.S. Securities and Exchange Commission has approved Cboe to list binary options tied to company performance indicators, including metrics reported by Coinbase, Robinhood and MARA. The contracts allow traders to take yes-or-no positions on specific business figures rather than directly trading cryptocurrency prices. Robinhood is expected to become the first retail broker to offer the products.
Cboe Options Target Corporate Performance Metrics
The approved contracts cover key performance indicators reported by selected publicly traded companies. Traders can take positions on Coinbase trading volume, Marathon Digital’s Bitcoin production, and Robinhood’s customer and revenue figures.
According to the SEC’s approval statement, the contracts will trade on a securities exchange as standardized, cash-settled, European-style options. They will qualify as national market system securities and remain subject to securities laws.
Unlike conventional options, binary contracts produce outcomes based on whether specified conditions are met. The approved structure allows traders to take positions on defined company metrics without directly buying the underlying shares or cryptocurrency.
SEC Sets Trading Rules and Investor Protections
The SEC said the contracts must follow existing securities exchange requirements. These include customer account rules, margin requirements, trading halts, auction mechanisms and market-maker obligations.
Additionally, exchanges must apply rules governing order types, order duration and trading instructions. The commission said these requirements provide investor protections under securities laws.
SEC Chair Paul Atkins welcomed the decision, describing it as reflecting “a new spirit of harmonization, innovation, and investor choice.” He also said the approval addressed unnecessary obstacles to introducing lawful financial products.
CFTC Jurisdiction Remains Open for Other Contracts
However, the SEC emphasized that its approval covers only the specific binary options structure described in the order. It does not determine the regulatory treatment of differently structured contracts based on the same company metrics.
The commission also said its decision does not exclude Commodity Futures Trading Commission jurisdiction over KPI contracts designed to fall under its authority.
For cryptocurrency-related companies, the products create another way to trade exposure to business performance. Coinbase trading volume and MARA’s Bitcoin production are among the metrics covered, while Robinhood’s customer and revenue figures provide additional potential trading targets.
