Cboe Global Markets, Inc.

Cboe Global Markets, Inc. is the world's largest options exchange operator and a leading global provider of trading, clearing, and market-data infrastructure across equities, derivatives, and foreign exchange, generating $4.71 billion in GAAP revenue in fiscal 2025. Cboe's derivatives franchise is anchored by its exclusive U.S. license to list options on the S&P 500 Index — the SPX options complex — which accounts for a dominant share of the company's transaction-driven revenue and has become a secular beneficiary of the global shift toward short-dated, index-based options strategies.

This is a story about a business with genuine competitive moats — exclusive index licenses, liquidity-concentrating network effects, and regulatory barriers to entry — that is simultaneously navigating intense competition in its non-proprietary markets and executing a strategic realignment to focus capital on its highest-return activities. The company's 2025 results were exceptional: revenue grew 15% year over year, diluted earnings per share rose 45% to $10.42, and free cash flow exceeded $1.15 billion. But the pace of 2025 was elevated by a surge in trading volumes that may not be repeatable, and the stock at roughly 30 times trailing earnings embeds expectations that are more demanding than the company's own mid-single-digit organic growth guidance for 2026.

The file turns on a single question: whether the secular growth in index options trading — driven by zero-days-to-expiry products, international retail adoption, and the structural expansion of derivatives as a portfolio tool — can compound at a rate sufficient to justify the current multiple, or whether the cyclical components of 2025's volume surge will mean-revert faster than the market appears to anticipate.