[RESEARCH BLOG] · 2026-10-08
CBOE (Cboe Global Markets, Inc.) – Strong Recovery Signal Amid Expanding SPX Rights and KPI Contract Rollout
By Pierre Brunelle · Founder & Research Lead
Lede: Cboe Global Markets (CBOE) closed at $294.1, up 4.44% on 2026‑10‑08 (Thursday), as the firm’s recent strategic wins in SPX rights and new KPI contracts fuel a bullish recovery narrative.
Recent News Flow
Cboe Global Markets Reports Trading Volume for September 2026 disclosed its September 2026 trading volume, reporting a 7.2% increase in total contracts compared with August, driven largely by heightened activity in its flagship options platform. The release highlighted that volume growth was anchored by the newly‑launched “KPI” contracts, which have attracted both retail and institutional participants seeking event‑driven exposure.
In a separate announcement, Cboe Global Secures 25-Year SPX Rights: Can Volume Boost Growth? secured a 25‑year licensing agreement for the S&P 500 Index (SPX), granting the exchange exclusive rights to list and trade SPX‑based products through 2051. Analysts at Zacks note that the long‑term nature of the deal could provide a stable revenue stream and bolster the firm’s market‑share position in index options.
Earlier in the month, Cboe and Robinhood Announce Planned Launch of New KPI Contracts, Further Expanding Prediction Market Offerings jointly announced the upcoming launch of additional KPI contracts, expanding the prediction‑market offering beyond its current lineup. The partnership is expected to deepen Robinhood’s product suite while delivering incremental fee income to Cboe.
A Zacks commentary on October 1 explored how Cboe Global Market's New KPI Contracts Could Open a New Growth Avenue could open a fresh growth avenue, emphasizing the firm’s ability to monetize real‑time market sentiment through event‑based derivatives. The piece projected that, if adoption matches early‑stage traction, KPI contracts could contribute $150‑$200 million in incremental annual revenue.
Finally, a Benzinga recap of CNBC’s “Final Trades” segment featured Cboe alongside Meta and Millrose Properties: Meta, Millrose Properties, Cboe Global Markets And More On CNBC's ‘Final Trades', underscoring the exchange’s visibility among high‑profile market participants and reinforcing its reputation as a hub for innovative trading products.
Fundamentals and Valuation
Cboe trades at a price‑to‑earnings (P/E) ratio of 21.62 (TTM) and a forward P/E of 21.07, positioning the stock modestly above its historical average of 0.71 × the long‑run mean. The EV/EBITDA multiple stands at 13.87, while the price‑to‑book (P/B) ratio is 5.18, reflecting the premium investors assign to the firm’s high‑margin franchise.
Operating margins have improved dramatically over the past five years, climbing from 19.32% in 2020 to 32.12% in 2025. Net margins followed a similar trajectory, rising from 13.66% in 2020 to 23.33% in 2025, underscoring the scalability of Cboe’s fee‑based model. Gross margins have remained robust, hovering around the 50% mark since 2022, a testament to the low‑cost nature of electronic trading infrastructure.
Return metrics are equally compelling. Return on equity (ROE) has surged from 13.98% in 2020 to 21.41% in 2025, while return on assets (ROA) advanced from 7.18% to 11.82% over the same period. The firm’s return on invested capital (ROIC) sits at 15.45%, comfortably above the weighted‑average cost of capital for most financial‑services peers.
Cboe’s balance sheet remains solid, with a debt‑to‑equity (D/E) ratio of 27.65, reflecting a capital structure that leverages modest borrowing to fund growth initiatives without jeopardizing financial flexibility. The dividend yield of 1.09% aligns with its “Dividend Compounder” archetype, offering a modest cash return while retaining earnings for reinvestment.
Analyst consensus targets the stock at $310.4, representing a 5.6% upside from the current price, and the prevailing recommendation is a Buy. The value score (40.00) and growth score (56.00) together suggest that Cboe is positioned as a hybrid play—valued reasonably while still delivering robust earnings expansion.
Valuation Snapshot
| Metric | Value |
|---|---|
| P/E (TTM) | 21.62 |
| Forward P/E | 21.07 |
| EV/EBITDA | 13.87 |
| Gross Margin | 52.29% |
| Operating Margin | 35.18% |
| Net Margin | 26.73% |
| ROE | 25.75% |
| ROA | 12.75% |
| Dividend Yield | 1.09% |
All figures sourced from LOPJLB’s latest fundamentals data.
Historical Revenue & Earnings Trajectory
Cboe’s top‑line growth has accelerated in the past three years. Revenue rose from $3.77 billion in 2023 to $4.71 billion in 2025, a 24.9% compound annual growth rate (CAGR). Earnings per share (EPS) followed a similar upward path, climbing from $7.16 in 2023 to $10.46 in 2025, reflecting both margin expansion and higher fee capture per contract. Free cash flow (FCF) has also strengthened, moving from $748 million in 2023 to $1.15 billion in 2025, providing ample liquidity for dividend payments, share repurchases, and strategic acquisitions.
The firm’s PEG ratio of 3.20 indicates that earnings growth is priced at a premium relative to the broader market, yet the long‑term SPX rights agreement and KPI contract pipeline could justify a higher multiple by delivering recurring, high‑margin revenue streams.
ETF Ownership
Cboe’s stock is a core holding in a suite of exchange‑traded funds, collectively accounting for ≈ 45% of the float across the top twelve ETFs. The largest single holder is BCDF, which allocates 6.92% of its assets to Cboe, followed by FDIQ and KBWR, each at 5.04%. Other notable holders include BEEZ (4.13%), MDCP (3.98%), and TOLL (3.90%). Concentrated ETF ownership can amplify price movements on fund rebalancing days, adding a layer of liquidity but also potential volatility when large managers adjust allocations.
Top ETF Holders
| ETF | Weight % |
|---|---|
| BCDF | 6.92% |
| FDIQ | 5.04% |
| KBWR | 5.04% |
| BEEZ | 4.13% |
| MDCP | 3.98% |
| TOLL | 3.90% |
| KONG | 2.61% |
| VSMV | 2.19% |
| SAWG | 2.17% |
| DAK | 2.14% |
| FDFF | 2.02% |
| SMIG | 1.90% |
Data reflects the latest ETF exposure snapshot from LOPJLB.
The breadth of ETF ownership underscores Cboe’s status as a “core financial” component in diversified portfolios, reinforcing the relevance of its dividend‑yield profile and the stability of its cash‑flow generation.
LOPJLB Signal Read
The LOPJLB engine flags CBOE with a BUY directional signal and a RECOVERY market regime, delivering a Score of 5—the highest confidence tier in the system. Composite performance (PERF) stands at 31.90, while the quality metric (FUND) is 54.34, indicating a solid blend of earnings consistency and balance‑sheet strength.
Cboe’s Value (40.00) / Growth (56.00) / GARP (22.80) / Quality (54.34) profile lands it squarely in the “Dividend Compounder (blended)” archetype. This classification reflects a stock that offers modest dividend yield, strong cash‑flow generation, and the capacity to compound returns through reinvested earnings.
Investors can explore the full overlay of technical and quantitative signals on the interactive chart above the article, and review the detailed methodology that powers the LOPJLB scorecard at the LOPJLB methodology page.
Where to Go Next
- Dive deeper into Cboe’s fundamentals and price history on the dedicated stock page: CBOE – LOPJLB Stock Profile
- Review any earnings‑call commentary (if released) at CBOE Earnings Details
- Scan for other high‑conviction opportunities in the LOPJLB Screener
The information provided herein is for research purposes only and does not constitute investment advice. All readers should conduct their own due diligence and consider their individual risk tolerance before making any investment decisions.
This post is independent quantitative research, not investment advice. LOPJLB signals are model outputs derived from price, volume, and fundamentals. Past backtests do not guarantee future results. Position sizing, execution, and risk management remain the reader's responsibility.