CBOE Jumps as Much as 10% on Exclusive 25-Year S&P 500 Options Deal: “Certainty and Continuity”

Key Takeaways

• Cboe jumped as much as 10% early Tuesday after extending its exclusive S&P 500 options license through 2051.
• Cboe says the 2027 royalty reset will have a “de minimis” impact on net revenue growth.
• SPX options set a record 970.6 million contracts in 2025, the fourth straight record year.
• The stock trades at around 18 times forward earnings, with analysts expecting EPS growth of around 19% a year.
• Third-quarter results arrive Friday, October 30, with specific 2027 guidance due in February.

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Cboe Global Markets (CBOE) jumped as much as 10% at the open on Tuesday and was up about 5% in late-morning trading, at about $266, after the exchange locked up its best franchise for another quarter century.

Before the open, Cboe and S&P Dow Jones Indices announced a 25-year extension of their exclusive licensing agreement. CEO Craig Donohue said it provides “the certainty and continuity that our customers have come to expect.”

That’s an understatement.

What exactly happened

• Exclusive S&P 500 Index (SPX) options rights, extended through 2051
• Room to collaborate on new products, including tokenized options (options represented as digital tokens)
• No 2026 royalty fee impact; new terms begin in 2027

A second release, Additional Details Relating to Anticipated Financial Impacts, called the 2027 effect “de minimis.”

Why this matters

An index option lets an investor bet on, or hedge against, the entire S&P 500 in a single trade. An exclusive license means Cboe is the only exchange that can list them. The biggest long-term risk was always renewal, and that risk is off the table until 2051.

SPX options set a record 970.6 million contracts in 2025, with average daily volume up 25%, the fourth straight year of record trading.

Shares trade around $266, still well below the 52-week high of roughly $371. The chart above ends at Monday’s close of $253.

Here’s the business that license sits underneath…

Revenue grew from $3.49 billion in 2021 to $4.71 billion in 2025, about 8% a year.

At around 18 times forward earnings, and with analysts expecting EPS growth of around 19% a year, the multiple is not demanding.

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What’s next

Of course, a license this valuable doesn’t come cheap. The real question is what Cboe is paying for all that certainty, and whether the new terms dent margins. So far, Cboe’s answer is reassuring, but it has not put a dollar figure on the 2027 reset.

The next catalyst is close. On Monday after the close, Cboe announced the date of its third-quarter earnings release and conference call: before the open on Friday, October 30, at 8:30 a.m. ET. That’s when management can walk through the new terms in detail, and specific 2027 guidance follows in February.

My view is that a 10% pop on a “renewal” makes sense when the renewal is for the crown jewel. Twenty-five years of exclusivity on the world’s most important index is worth paying for, as long as the fee doesn’t eat the margin.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!