Release 34-106659 approves Cboe binary contracts on indicators that 23 listed companies report, and Marathon Digital Holdings' list covers BTC produced, blocks won, total holdings and energized hashrate. Settlement reads the figure in the company's SEC filing rather than its earnings press release, and nothing can list until Cboe Clear U.S. is registered as a clearing agency.
The Securities and Exchange Commission has approved exchange-listed options that settle on how much bitcoin a mining company reports producing. An order dated October 13 grants accelerated approval to a Cboe Exchange rule change permitting binary options on key performance indicators that listed companies report in their filings, and the 23 eligible issuers written into the rule include Marathon Digital Holdings alongside Apple, Alphabet, NVIDIA, JPMorgan, Coinbase and Robinhood.
The rule text lists seven indicators for Marathon Digital Holdings: diluted earnings or net loss per share, revenues, "BTC Produced (# BTC)", "BTC Purchased (# BTC)", "Total Bitcoin Holdings (# BTC)", "Number of Blocks Won (# Bitcoin (BTC))" and "Energized Hashrate (EH) (# EH/s)". Five of the seven are denominated in bitcoin or exahashes per second rather than dollars. A contract on energized hashrate settles on the capacity the company reports having switched on, taken from the figure in its own disclosure.
The contracts themselves are plain. The order describes them as European-style and cash-settled, exercisable only at expiration, with a default exercise settlement amount of one dollar. The payout turns on whether the reported indicator meets its threshold, not on where the share price went. The contract multiplier is one, against the 100 that standard US equity options carry, so a single contract is a dollar-scale position. Position limits run to 25,000 standard option contracts per expiration, and because 100 binary KPI contracts count as one standard contract, that ceiling works out at 2.5 million binary contracts on the arithmetic the rule sets out.
Settlement reads the number in the company's earnings-related filing with the Commission, on Form 8-K, 10-Q or 10-K, rather than the figure in its earnings press release. The order notes that the two are generally the same. Whether a contract settles in the morning or the afternoon depends on whether the issuer reports before the open or after the close.
Nothing can trade yet. The options are to clear through Cboe Clear U.S., which has applied for registration as a clearing agency, and the order records that the exchange will not list the contracts until that registration and the associated rule filings are approved. Cboe has been in this position recently: the Commission cleared its BZX venue to list leveraged bitcoin and ether funds that still could not trade because their registration statements had not been declared effective. No trading date for the KPI contracts has been announced.
Chairman Paul Atkins published a statement the day the order was granted, and it is largely concerned with the approval's limits. The order "speaks solely to the trading of these specific binary options contracts on a securities exchange," he wrote, and "does not address what may be similar products with the same underlying KPIs." It also "does not address—and does not foreclose—CFTC jurisdiction over KPI contracts based on the same underlying KPIs." The CFTC is separately proposing to write event contracts into the swap definition, and federal appeals courts have disagreed over which agency's rules govern contracts that pay on an outcome.
Cboe's case for the product, as set out in the filing the Commission approved, rests on the size of the companies involved and the provenance of the numbers. The exchange argues that large, highly capitalized issuers with liquid stock and options markets are harder to manipulate, says it "believes the proposed universe of issuers will prevent fraudulent and manipulative acts and practices," and describes indicators drawn from Commission filings as "publicly verifiable." On the question of who might learn a KPI early, it contends the risks are "substantially identical" to those already present in trading the underlying stock, and points to its surveillance program, its membership of the Intermarket Surveillance Group and its regulatory services agreement with FINRA. The filing also describes the product's "retail nature" and calls it a "defined-risk" tool.
Two details complicate the mining read. The rule list names Marathon Digital Holdings, Inc., the name the company reported under before it became MARA Holdings, so the eligible issuer and the filer whose 10-Q would supply a settlement figure are the same business under different labels. And energized hashrate becomes tradable at a point when the company has been moving away from describing itself as a miner: MARA's first-quarter filing in May no longer characterized the firm primarily as a bitcoin miner after it sold 20,880 bitcoin and turned toward AI infrastructure.
Binary options on retail-facing underlyings are not new to Cboe, which has been preparing S&P 500 binary contracts for retail customers with Charles Schwab. What the October 13 order adds is a set of underlyings that are company disclosures rather than prices, and a list that puts one bitcoin miner's production and hashrate among them. Until Cboe Clear U.S. is registered, the approved rule permits contracts that cannot yet be listed.
