NYSE moves to bring all-or-nothing options to stocks and company earnings
ICE•The NYSE expects to begin trading binary return options within days, with 12 underlying securities including Apple, Nvidia, Tesla and SPDR S&P 500 ETF Trust. It is also seeking SEC approval for KPI options that would pay based on company-reported metrics.
1. New options contracts
The New York Stock Exchange is preparing to launch binary return options that let investors bet on whether a stock or ETF closes above or below a set price. The contracts are expected to begin trading within days and initially cover 12 securities, including Apple, Nvidia, Tesla and the SPDR S&P 500 ETF Trust, with more to be added over time.
2. KPI options await approval
The exchange is also awaiting SEC approval for binary key performance indicator options. These would let investors trade directly on metrics such as net sales, earnings per share, cloud-computing revenue or vehicle production, and would pay either $1 or nothing at expiration depending on whether the reported metric meets the contract's strike level. The cash-settled, European-style contracts could be exercised only at expiration.
3. Demand for event trading
NYSE chief product officer Kevin Tyrrell said the exchange has seen strong growth in the U.S. options market and interest in newer products. Cboe Global Markets recently received approval for similar KPI-based contracts in partnership with Robinhood.
