A stock exchange has asked the SEC for permission to list bets on whether a company beats its own earnings number, and the payout would be one dollar or nothing

Prediction markets have been trying to get onto a stock exchange for a while. One of them may be about to.

MEMX filed a proposal with the Securities and Exchange Commission on 11 August to adopt a new Chapter 30 of its rules, covering something it calls a securities event contract. The Commission published the filing for comment on Thursday at 91 FR 55384, under file number SR-MEMX-2026-25. Comments close on 17 September.

A securities event contract is a binary option. It asks a question about an issuer of an NMS stock, and it pays a fixed amount if the answer turns out to be yes. If the answer is no, it expires and pays nothing at all. MEMX says the first ones would be built on a financial metric, and gives the example of whether a company announces earnings, revenues, sales or another key figure equal to or above a stated threshold.

The mechanics are unusually plain for an options filing. A buyer bids for a yes contract or a no contract, and the order only becomes a position when it is matched against somebody taking the other side of the same question at the same expiration and the same exercise price. Bids run from one cent to ninety-nine cents in one-cent steps. The default settlement amount is a dollar, and unlike a listed call or put there is no multiplier of 100 behind it, which is why MEMX has to explain in its own filing that 250,000 of these at a dollar is $250,000 of notional value rather than $2.5m.

That is also why the position limits look strange until you read the conversion. The limit on a securities event contract is the same as the equity option position limit for the underlying issuer, and 100 securities event contracts count as one standard option contract towards it.

The argument for the securities framework

MEMX is explicit about where this product comes from. Prediction markets grew up on designated contract markets regulated by the Commodity Futures Trading Commission, listing contracts on political, economic and commercial outcomes, and MEMX says investors in the securities markets would find the same thing useful. Its case for building it as an option instead is that an existing listed call or put only lets you express a view on the share price, and a share price moves for reasons that have nothing to do with the event you were right about.

Then comes the part that is doing the real work. Classifying these as securities options, the Exchange argues, is what preserves the integrity of antimanipulation restrictions, insider trading prohibitions and material nonpublic information controls, because the contracts are tied to the Commission's own disclosure regime. Trading would sit inside the existing options surveillance apparatus, including the Options Regulatory Surveillance Authority plan under which FINRA runs insider trading surveillance for the whole American options market. MEMX says it will work with FINRA to adapt those surveillances to the new instrument.

Read that argument next to the product and the reason for it is obvious. A contract that pays a dollar if a company's revenue clears a threshold is a contract whose entire value, right up to the moment of the announcement, turns on a number that a small number of people already know.

Not the only one asking

Cboe got there first. Its filing to list what it calls binary KPI options, binary contracts on issuer-reported key performance indicators, was published on 15 July at 91 FR 43418 under file number SR-CBOE-2026-061. MEMX cites it, says its own proposal does the same basic thing, and says it has taken a different approach in certain areas that it considers better suited to the product.

Neither is approved. Both are notices asking the public what it thinks.