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NYSE moves to bring all-or-nothing options to stocks and company earnings
Reuters • • business
Key Points:
- The New York Stock Exchange (NYSE) is set to launch a new type of options contract allowing investors to make all-or-nothing bets on whether a stock or ETF will close above or below a specific price.
- This move responds to a surge in trading of options and event-based contracts, catering to both retail and institutional investors seeking precise market exposure and risk management tools.
- NYSE is also seeking SEC approval for binary key performance indicator (KPI) options, which would enable trading based on company earnings metrics or other performance thresholds rather than stock price movements.
- These KPI options would be cash-settled, European-style contracts that pay either $1 or nothing at expiration depending on whether the underlying metric meets the contract's strike level.
- The developments reflect NYSE's effort to capitalize on growing demand for innovative, event-driven trading products amid significant growth in the U.S. options market.
