SEC Delays Decision on Trades Tied to Subscriber Counts and KPIs

cboe cboe exchange investor relations kpi trading memx recurring revenue sec securities and exchange commission subscriber metrics Sep 12, 2026

Proposals before the SEC could let investors trade directly on subscriber counts, revenue targets and other operating metrics, adding pressure for management teams balancing long-term recurring revenue growth against short-term investor expectations.

A subscriber count is already more than an operating number for a public subscription company. It can move the stock, shape an earnings call and affect how investors judge whether the business is succeeding.

Now U.S. exchanges are asking regulators to let investors trade directly on whether that number hits a target.

The Securities and Exchange Commission is considering proposals that would allow investors to take a position on whether a company reports a subscriber count, revenue figure, margin or another key performance indicator above a set level.

The trades would be tied to metrics the company itself publicly reports in SEC filings, rather than outside estimates or private company data.

Here is how that would work.

An investor who believes a company will beat a particular subscriber target can already buy its stock or options. But even if the subscriber prediction is right, the stock could fall because investors dislike the company's margins, spending, outlook or something else in the earnings report.

The proposed trades would separate the KPI from the rest of the company. An investor could trade directly on whether the subscriber number clears the specified target.

MEMX, one of the exchanges asking to offer these trades, makes that case in its SEC filing. It says an investor may correctly predict a company result, including subscriber levels, but still lose money on the stock because many other factors affect the share price.

The First Proposal Is Now Delayed

Cboe Exchange, one of the major U.S. options exchanges, filed the first proposal in June. Cboe calls the products "binary KPI options." In plain English, they are yes-or-no trades tied to a result reported by the company. Did the KPI reach the target or didn't it?

The proposed list goes well beyond subscription businesses and covers large public companies across several industries.

But a number of the measures are familiar to subscription executives. They include Robinhood Gold subscribers and average revenue per user, Coinbase Subscription and Services Revenue, Apple Services net sales and Disney streaming operating income. Netflix revenue and operating margin measures are also included.

The SEC opened the proposal for public comment in July. Rather than act at the end of its initial review period, the agency gave itself more time. The SEC now has until October 13 to approve Cboe's proposal, reject it or open a longer review that could lead to rejection.

None of these Cboe KPI products has been approved under the proposal.

More Exchanges Want In on KPI Trading

Cboe is no longer alone. MEMX, another U.S. stock and options exchange, filed its own proposal in August. It also wants to offer yes-or-no trades tied to specific company results.

Its proposal explicitly includes metrics related to customers, users and subscribers, along with other measures of company performance. MEMX proposes starting with a limited group of large, heavily traded public companies. It could initially select no more than 25 companies based largely on market size or trading activity.

But MEMX describes that as an initial group while the exchange and its members gain experience with the new products. Its filing says the exchange may later seek SEC approval to increase the number of companies covered.

That puts a broader question in front of regulators: can company-reported operating metrics, including subscriber counts, become something investors trade on directly? Cboe started the push, and MEMX now wants in, with room to expand if the market develops. Comments on the MEMX proposal are due September 17.

Companies Named in the First KPI Proposal Are Mostly Silent

Seven letters are now posted in the SEC proceeding on Cboe's proposal. Most came from exchanges, trading platforms, investment firms or financial-market groups.

The public companies whose results could become the basis of the first proposed trades have largely stayed out of the debate. Apple, Coinbase, Disney and Netflix, for example, are not among the commenters currently listed by the SEC.

An important point in both proposals: companies would not get an opt-in or opt-out right over whether their reported KPIs could be used. They would not get to decide whether a subscriber count, revenue figure or another reported KPI becomes the basis of one of these trades.

Robinhood is the notable exception, with an important distinction. Its Gold subscriber count and ARPU are among Cboe's proposed measures, but the comment supporting the proposal came from Robinhood Financial and Robinhood Securities, the company's brokerage businesses.

In other words, Robinhood weighed in from the trading side of its business, arguing that KPI trades would give investors a way to trade or hedge around one company result without also taking a position on everything else that could move the stock.

The silence from the other named companies does not tell us whether they support or oppose the proposal. It does mean that much of the public debate so far is being driven by businesses involved in trading or offering these products, rather than by the management teams whose results would be used.

Some commenters, including Kalshi, Paradigm and Rothera, want the SEC to wait while federal regulators sort out who should oversee products like these. Cboe disagrees. It says the trades belong under SEC oversight and has asked the agency to approve its proposal "without delay."

Insider Trading Was Already a Concern in 2008

The insider-trading question isn't new. In 2008, another federal market regulator, the Commodity Futures Trading Commission, was considering how this kind of event-based trading should be handled. SEC staff weighed in on products tied to corporate events and results, including earnings announcements.

They raised concerns about insider trading and whether management could have an incentive to manipulate the number being traded. SEC staff used earnings per share as an example. That old discussion has resurfaced because Cboe cited the 2008 SEC letter in its response to the current comments. Cboe argues that securities markets already have rules and monitoring intended to catch insider trading and manipulation.

If investors can put money directly on whether a subscriber count, revenue figure or other KPI clears a particular target, advance knowledge of that number becomes especially valuable.

Insider Take

Subscription management teams already deal with a difficult mismatch in time horizons. They make decisions intended to improve the economics of the subscriber relationship over years while investors evaluate the business quarter by quarter.

We saw that recently at eDreams ODIGEO, the European travel company behind an 8.1 million-member Prime travel subscription. Management had told investors it was investing more in Prime and changing the timing of some subscription payments as part of its longer-term growth strategy. Its shares still fell 16.37% after its latest quarterly results.

A recurring-revenue business cannot be understood through one number. Subscriber growth can improve while cash collection or margins move the other way. Management may accept pressure on one measure because it believes the economics of the subscriber relationship will be stronger over time.

These proposed trades are designed to isolate one result. For an investor, that's the appeal: if you have a strong view on subscriber growth, you could trade on that metric without also having to be right about the rest of the company's earnings report.

Management has the opposite job. Subscription leaders have to understand how the numbers work together. The tension between long-term recurring revenue growth and short-term investor expectations already exists. A market built around individual KPIs could put more money and attention on a single number.

For subscription operators, that is the part of this SEC decision worth watching.

Related Member Resources

Markets can focus heavily on a single number, while the health of a subscription business depends on how several measures move together. These resources help teams look past one KPI and understand what is driving the business underneath it.

Subscription Growth Quality Framework: Beyond Subscriber Adds (Includes Scorecard)
Use the framework and scorecard to assess growth beyond subscriber adds, including retention, engagement, revenue quality and long-term business value. It helps management determine whether a headline KPI reflects healthier growth or only one part of the picture.
Revenue Is a Lagging Indicator: How to Read Early Operating Changes
This guide helps leaders trace changes in revenue back to earlier shifts in acquisition, conversion, retention, payments, subscriber behavior and pricing. It is useful when one financial result is getting outsized attention and the team needs to understand what changed upstream.