SEC approves binary options tied to performance metrics at 23 companies

The SEC has approved binary options contracts tied to operating metrics at major crypto and fintech firms, clearing the way for retail traders to bet on whether companies like Coinbase, Robinhood and Marathon will hit specific performance targets. This marks a significant expansion of derivative products available to individual investors and signals renewed regulatory coordination between the SEC and CFTC.

• SEC approved binary options on key performance indicators for 23 publicly traded companies on October 13.
• Contracts will track Coinbase trading volume, Robinhood customer count and revenue, and Marathon bitcoin production.
• Robinhood expects to be the first retail brokerage to offer these contracts once clearing house registration completes.

• 23 Publicly traded companies with KPI-linked binary options approved by SEC
• Oct. 13 Date SEC Chairman Paul Atkins approved the Cboe Global Markets rule change

CoinDesk reported that the U.S. Securities and Exchange Commission has approved the listing of binary options contracts tied to specific performance metrics of 23 U.S. publicly traded companies. Binary options are the simplest form of options contracts, allowing traders to bet on a simple yes-or-no outcome, such as whether Coinbase Global’s trading volume will exceed a predetermined level by a set expiration date. The contracts approved cover trading volume at crypto exchange Coinbase Global, customer count and revenue at Robinhood Markets, and bitcoin production at mining firm Marathon Holdings.

SEC approves cash-settled contracts after decades of regulatory turf disputes

SEC Chairman Paul Atkins approved the rule change filed by Cboe Global Markets on October 13, according to his statement on the approval. The binary options will be cash-settled and European-style, meaning traders can only exercise them at expiration rather than at any point before maturity. The contracts will settle based on figures reported in company SEC filings rather than numbers cited in earnings presentations, ensuring reliance on official regulatory disclosures.

Atkins framed the approval as breaking a pattern of regulatory conflict.

For decades, jurisdictional “turf wars” between the SEC and the CFTC have frustrated innovation and left a void of unrealized financial products in their wake. Today’s approval order, however, reflects a new spirit of harmonization, innovation, and investor choice, removing unnecessary obstacles to the lawful introduction of novel financial instruments within our markets.

SEC Chairman Paul Atkins, statement on October 13 The statement clarified that SEC approval applies only to these specific binary options structures traded on securities exchanges and does not address similar contracts structured differently or those that fall under Commodity Futures Trading Commission jurisdiction.

Robinhood set to launch contracts as clearing registration moves forward

Cboe plans to list the contracts this month, with Robinhood expected to be the first retail brokerage to offer them to individual investors.

Trading cannot begin until Cboe Clear U.S., the clearing house, receives provisional registration, with a separate application still pending.

Eleanor Terrett, host of Crypto America, noted on X that the approval creates novel trading opportunities for crypto investors. She wrote that for crypto, “this creates a new way to trade crypto-linked company performance beyond betting directly on BTC’s price,” while emphasizing that the SEC’s approval leaves room for differently structured contracts to potentially fall under CFTC oversight.

The BlockWest read. The approval reflects institutional confidence in derivative products beyond spot price movements, allowing allocators to express views on company execution rather than just asset volatility. For platforms like Robinhood, first-mover status in retail distribution could capture significant flow in contracts tied to their own business metrics, creating incentives to maintain competitive pricing and liquidity.

The next critical milestone is Cboe Clear U.S. obtaining provisional registration from the SEC, a separate application still under review that must complete before trading in the contracts can begin.

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