Cboe clearinghouse gets temporary SEC nod for binary options

Cboe Clear U.S., the clearinghouse owned by exchange operator Cboe Global Markets, can now clear binary options that are securities, under a temporary registration the SEC granted on Oct. 22 [1]. A clearinghouse, or clearing agency, stands between the buyer and seller of each trade and guarantees it is settled. A binary option pays a fixed cash amount if a set event happens and nothing if it does not, according to the clearinghouse's rules quoted in the order [1].

The registration runs "for a period of 18 months from the date of this order," and comes with an exemption from certain requirements, the SEC said [1]. The agency said it is not, at this time, deciding whether the application meets certain registration requirements, which it exempted for those 18 months [1]. Cboe Clear U.S. applied on June 30 and amended its application five times. The SEC received one comment letter, which supported temporary registration as a "stopgap" but, for permanent registration, raised concerns about "the risk of vertically integrated solutions" and a more fragmented clearing structure [1].

Cboe said the clearinghouse will first use the registration for "Cboe's binary securities options tied to specified corporate key performance indicators (KPIs)." Those options are "planned to list on Cboe Options Exchange and be available on Robinhood in the fourth-quarter 2026," Cboe said [2]. The clearinghouse already clears futures and swaps, including digital asset derivatives, as a CFTC-registered clearing organization [2].

Robinhood described the products on Sept. 29 as "binary options contracts made available through Cboe that allow you to trade on company-specific KPIs like whether a company beats earnings, hits a revenue target, or crosses a key financial milestone." It said the contracts, which it places in its "prediction markets hub," will require options approval and will "begin rolling out to eligible customers in the coming weeks" [3].

"These expanded capabilities position Cboe Clear U.S. to become an innovation lane to support new products and meet evolving customer needs," said Dale Michaels, head of Cboe Clear U.S. [2].

Sources

1. SEC, Release No. 34-106723, "Order Granting an Application, as Amended, for Temporary Registration as a Clearing Agency under Section 17A of the Securities Exchange Act of 1934," Cboe Clear U.S., LLC, File No. 600-47, Oct. 22, 2026, https://www.sec.gov/files/rules/other/2026/34-106723.pdf, accessed Oct. 23, 2026, 2:23 p.m. ET.
2. Cboe Global Markets, "Cboe Clear U.S. Receives SEC Approval to Expand Clearing Capabilities," Oct. 23, 2026, 12:30 p.m. ET, https://ir.cboe.com/news/news-details/2026/Cboe-Clear-U-S--Receives-SEC-Approval-to-Expand-Clearing-Capabilities/default.aspx, accessed Oct. 23, 2026, 2:23 p.m. ET.
3. Robinhood Newsroom, HOOD Summit 2026 post, Sept. 29, 2026, https://newsroom.aboutrobinhood.com/hood-summit-2026/, accessed Oct. 23, 2026, 2:24 p.m. ET.

Holding the Corner.

Not financial advice.