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Cboe Global Market's New KPI Contracts Could Open a New Growth Avenue
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Key Takeaways
CBOE plans to launch binary KPI contracts tied to 23 U.S.-listed companies, pending regulatory approval.
CBOE's partnership with Robinhood could expand access to targeted, event-driven products for investors.
CBOE Clear U.S. seeks SEC registration to clear the contracts, potentially broadening its clearing business.
Cboe Global Markets, Inc. (CBOE - Free Report) is expanding its derivatives portfolio with a new category of binary contracts tied to company-specific key performance indicators (KPIs). The products are expected to launch in October 2026, subject to regulatory approval, with Robinhood set to become the first retail broker to offer them.
CBOE plans to initially list contracts linked to 23 U.S.-listed companies, giving investors a way to trade specific corporate metrics and events through SEC-regulated products. Cboe will waive fees on the contracts through the end of 2026, while Robinhood plans to offer them without fees during the period.
The launch could expand Cboe's retail reach and drive incremental trading activity by offering more targeted, event-driven products. It could also strengthen Cboe's relationship with Robinhood, potentially helping the exchange access a broader retail trading base.
More importantly, Cboe plans to leverage its capabilities across listing, trading and clearing, with Cboe Clear U.S. seeking SEC registration to clear the new contracts. Expanding its clearing capabilities could create additional revenue opportunities as CBOE supports a wider range of traditional and non-traditional financial products.
The new contracts could therefore diversify Cboe's product portfolio, increasing trading volumes and expanding its clearing business. Over time, greater adoption could strengthen CBOE's position in the growing event-based trading market and support its long-term revenue growth.
What About Its Peers?
CME Group Inc. (CME - Free Report) has expanded its event-contract offerings, providing traders with short-duration, outcome-based products. CME offers event-based and derivatives products across equities, rates, commodities and other asset classes. Its broad product portfolio and strong institutional participation support trading volumes and diversify revenue streams.
Nasdaq, Inc. (NDAQ - Free Report) has entered the event-based options market with cash-settled, European-style binary options tied to the Nasdaq-100 and Nasdaq-100 Micro Index. The contracts have a fixed $100 settlement amount and can trade with premiums ranging from $0.01 to $1.00. Its broad options portfolio and exchange infrastructure support its position in this growing segment.
CBOE’s Price Performance
CBOE stock has gained 10% year-to-date against the industry’s decrease of 12.5%.
Image Source: Zacks Investment Research
CBOE’s Valuation
The stock is undervalued compared with its industry. It is currently trading at a forward price-to-earnings multiple of 19.04, lower than the industry average of 19.63.
Image Source: Zacks Investment Research
Cboe Global’s Growth Projections
The Zacks Consensus Estimate for 2026 revenues indicates a 15.9% year-over-year increase, while that for earnings suggests a 29.2% year-over-year decline.
The consensus estimate for 2027 revenues indicates a 2.7% year-over-year increase, while that for earnings suggests an increase of 5.7% year-over-year.
The consensus estimate for 2026 and 2027 earnings has remained unchanged in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Cboe Global Market's New KPI Contracts Could Open a New Growth Avenue
Key Takeaways
Cboe Global Markets, Inc. (CBOE - Free Report) is expanding its derivatives portfolio with a new category of binary contracts tied to company-specific key performance indicators (KPIs). The products are expected to launch in October 2026, subject to regulatory approval, with Robinhood set to become the first retail broker to offer them.
CBOE plans to initially list contracts linked to 23 U.S.-listed companies, giving investors a way to trade specific corporate metrics and events through SEC-regulated products. Cboe will waive fees on the contracts through the end of 2026, while Robinhood plans to offer them without fees during the period.
The launch could expand Cboe's retail reach and drive incremental trading activity by offering more targeted, event-driven products. It could also strengthen Cboe's relationship with Robinhood, potentially helping the exchange access a broader retail trading base.
More importantly, Cboe plans to leverage its capabilities across listing, trading and clearing, with Cboe Clear U.S. seeking SEC registration to clear the new contracts. Expanding its clearing capabilities could create additional revenue opportunities as CBOE supports a wider range of traditional and non-traditional financial products.
The new contracts could therefore diversify Cboe's product portfolio, increasing trading volumes and expanding its clearing business. Over time, greater adoption could strengthen CBOE's position in the growing event-based trading market and support its long-term revenue growth.
What About Its Peers?
CME Group Inc. (CME - Free Report) has expanded its event-contract offerings, providing traders with short-duration, outcome-based products. CME offers event-based and derivatives products across equities, rates, commodities and other asset classes. Its broad product portfolio and strong institutional participation support trading volumes and diversify revenue streams.
Nasdaq, Inc. (NDAQ - Free Report) has entered the event-based options market with cash-settled, European-style binary options tied to the Nasdaq-100 and Nasdaq-100 Micro Index. The contracts have a fixed $100 settlement amount and can trade with premiums ranging from $0.01 to $1.00. Its broad options portfolio and exchange infrastructure support its position in this growing segment.
CBOE’s Price Performance
CBOE stock has gained 10% year-to-date against the industry’s decrease of 12.5%.
Image Source: Zacks Investment Research
CBOE’s Valuation
The stock is undervalued compared with its industry. It is currently trading at a forward price-to-earnings multiple of 19.04, lower than the industry average of 19.63.
Image Source: Zacks Investment Research
Cboe Global’s Growth Projections
The Zacks Consensus Estimate for 2026 revenues indicates a 15.9% year-over-year increase, while that for earnings suggests a 29.2% year-over-year decline.
The consensus estimate for 2027 revenues indicates a 2.7% year-over-year increase, while that for earnings suggests an increase of 5.7% year-over-year.
The consensus estimate for 2026 and 2027 earnings has remained unchanged in the past 30 days.
Image Source: Zacks Investment Research
CBOE carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.