Cboe Global Markets

Cboe’s competitive position is anchored by exclusive rights to list S&P 500 index options (SPX) through December 31, 2032 on an exclusive basis and through 2033 non‑exclusively, plus the proprietary VIX franchise and Cboe Futures Exchange.

These contracts have unmatched liquidity, enabling meaningful network effects and customer lock‑in for hedging and risk transfer. The scale and breadth of its multi‑asset exchange network and clearing footprint create efficient scale and cost advantages that are difficult to replicate.

Key risks to moat durability are eventual SPX license renewal, regulatory scrutiny on market data/access fees, and competition for multi‑listed options share. On balance, the combination of exclusivity, liquidity concentration and global distribution supports a high moat score.

Proprietary index options and VIX products sit at the top of the value chain and have exhibited sustained pricing power via per‑contract fees, access and data charges. In Q2 2025, options net revenue rose 19% with total options RPC up 1%, and Data Vantage grew 11%, reflecting the ability to charge for differentiated products and data.

Offsetting factors are regulatory caps on equities access fees starting in late 2025 and ongoing fee transparency initiatives that constrain certain levers in U.S. equities. The core proprietary complex and data still provide strong, defensible pricing power.

Revenue is diversified with a large recurring and subscription component from Data Vantage and access fees, plus toll‑like economics from options and futures volumes. Volatility regimes can cause quarter‑to‑quarter variation, but the structural adoption of options, including 0DTE SPX, supports medium‑term stability.

Q2 2025 index options ADV of roughly 4.7 million illustrates sustained demand for equity index hedging. Risks to predictability include normalization of volatility, interest‑rate driven shifts in clearing interest income in Europe, and regulatory changes in U.S. equities.

Overall, the blend of proprietary derivatives and recurring data yields above‑average visibility.

As of June 30, 2025, Cboe reported cash and equivalents of about 1.26 billion and total debt of 1.44 billion, implying modest net debt of roughly 0.2 billion on an adjusted cash basis.

Debt maturities are well‑laddered and supported by strong interest coverage and ample liquidity, with capex guidance of 75 to 85 million for 2025. The company generates substantial cash with low capital intensity, providing significant resilience and capacity for dividends, buybacks and selective M&A.

Cboe balances internal reinvestment with consistent returns of capital. In 2024 it paid roughly 249 million in dividends and repurchased about 206 million of stock, and in Q2 2025 it paid a 0.63 per share dividend while repurchasing 161 thousand shares with about 615 million remaining authorization.

Strategy discipline improved with the wind‑down of the spot crypto venue and consolidation of digital derivatives on CFE. Setbacks include prior digital asset write‑downs and the decision to exit Japan equities after underperformance, though both actions show willingness to redeploy capital.

Overall capital allocation is solid and shareholder‑minded.

Leadership transitioned in May 2025 to CEO Craig Donohue, an experienced derivatives executive and former CME CEO and OCC chairman. Subsequent organizational updates clarified accountability across Derivatives, Data Vantage, and Technology. While there has been turnover in certain roles, the bench remains deep with proven operators.

Incentives include ongoing dividends and measured buybacks rather than aggressive dilution, with stock‑based compensation at manageable levels. We view governance and execution as strengths, with succession risk addressed proactively.