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By Opalesque: The U.S. Securities and Exchange Commission (SEC) has approved Cboe Exchange's rule change to list binary options overlying Key Performance Indicators (KPIs), creating a regulated way to trade corporate performance metrics.
"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," said Paul S. Atkins, the SEC chairman. "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."
Binary KPI Options are cash-settled, European-style binary options (settled only at expiration) tied to specific operating or financial metrics (such as iPhone revenue, data-centre revenue, or delivery counts) rather than the stock price itself.
Each winning contract pays a fixed $1 if the target is met or exceeded, and $0 if it misses. Settlement is based on official metrics disclosed in SEC filings (such as Form 10-K, 10-Q, or 8-K) and not on initial earnings press releases. ...................... To view our full article Click here
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