Cboe Global Secures 25-Year SPX Rights: Can Volume Boost Growth?

Cboe Global Markets, Inc. CBOE is strengthening its core derivatives business by extending its exclusive licensing agreement with S&P Dow Jones Indices for another 25 years, through 2051. The agreement allows Cboe to continue offering trading in S&P 500 Index (SPX) options, one of its most important products.

The long-term extension is important for CBOE because SPX options generate significant trading activity across its derivatives business. SPX options recorded a record 970.6 million contracts in 2025, with average daily volume of 3.9 million contracts, up 25% year over year. Higher trading volumes can support Cboe's transaction and clearing-related revenues.

Cboe has also expanded the SPX product suite with new expirations, structures and products, helping attract both institutional and retail investors. The company can use the extended agreement to continue developing the franchise and benefit from growing demand for tools that provide exposure to U.S. equities.

The agreement could also support future innovation, as Cboe and S&P DJI may explore products such as tokenized options contracts. However, CBOE remains dependent on trading activity and market conditions. The company also expects revised royalty terms to begin in 2027, which could increase costs.

Overall, the extension secures CBOE's exclusive access to a key derivatives franchise and provides a long-term platform for volume and product growth. Sustained SPX activity, new product launches and potential innovations could support transaction-based revenue growth and strengthen Cboe's earnings over time.

CME Group, Inc. CME is expanding its S&P 500 options franchise with smaller, financially settled Micro E-mini S&P 500 options and Monday-through-Friday expirations. Its E-mini S&P 500 options also posted 1.3 million contracts in average daily volume in the second quarter of 2026, up 7% year over year. The move targets growing demand for flexible and accessible index exposure.

Nasdaq, Inc. NDAQ continues to strengthen its index derivatives franchise through its NDX options offering daily, weekly, monthly and long-term expirations as well as a broader index-product ecosystem. NDX options volume increased 24% year over year in the second quarter of 2026, reflecting strong demand for index-based derivatives.

CBOE stock has gained 14.5% in a year against the industry's decrease of 8.3%.

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The stock is undervalued compared with its industry. It is currently trading at a forward price-to-earnings multiple of 18.72X, lower than the industry average of 19.35X.

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The Zacks Consensus Estimate for 2026 revenues indicates a 15.9% year-over-year increase, while that for earnings suggests a 29.2% year-over-year decline.

The consensus estimate for 2027 revenues indicates a 2.7% year-over-year increase, while that for earnings suggests an increase of 5.7% year-over-year.

The consensus estimate for 2026 and 2027 earnings has remained unchanged in the past 30 days.

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CBOE carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).