Cboe KPI event contracts to debut on Robinhood

Cboe Global Markets (BATS: CBOE) is seeking regulatory approval for binary derivatives tied to specific company metrics, and Robinhood Markets (NASDAQ: HOOD) is set to be the first retail broker to offer these Cboe KPI event contracts. Cboe said the launch on Robinhood could come in October, pending approval.

Cboe announced the filing in July. It covers 100 key performance indicators (KPIs) of 23 public companies, and Apple, Coinbase Global, SpaceX, Tesla and Robinhood itself are among those expected to be featured.

The contracts reference discrete data points. Examples include Apple iPhone sales, SpaceX rocket or satellite launches and deliveries of specific Tesla models.

Cboe says the contracts are securities products, not the event contracts currently traded on designated contract markets.

According to Cboe, the contracts differ from comparable event-based contracts on designated contract markets (DCMs). The exchange operator described the product in a statement: “The KPI binary options will provide investors with a new way to take positions on specific company metrics and corporate events through Securities and Exchange Commission (SEC)-regulated products traded on Cboe’s registered U.S. securities exchange.”

Cboe also named federal preemption of state securities registration requirements among the benefits of trading the products within U.S. securities markets.

Robinhood announced its role at its third annual HOOD Summit in Houston. Cboe and Robinhood are both waiving fees on the contracts through the end of this year.

Most corporate event contracts currently available on prediction markets are tied to stock price fluctuations or corporate actions, including mergers and acquisitions and initial public offering (IPO) filings.

Robinhood also announced weekend trading in select equities and exchange-traded funds (ETFs) at the summit. The company plans to give clients access to artificial intelligence (AI) trading bots as well.