UBS reiterates Cboe Global Markets stock rating on June metrics

UBS reiterated a Neutral rating on Cboe Global Markets (CBOE) with a $335 target, while raising its Q2'26 EPS estimate ~1% to $3.55 vs $3.35 Street consensus and lifting revenue by ~1% (mainly from higher index options pricing, partly offset by lower equity options pricing). Despite reported June volume strength (23.0M average daily contracts; 33.4M record on June 5), UBS expects continued competition/perpetual futures headlines to keep the stock range-bound and noted the shares trade near the 52-week low. Separately, the SEC proposed eliminating the Order Protection Rule, which could lower market-participant connectivity costs, adding a potential regulatory tailwind.

Analysis

CBOE is increasingly being priced as a structural loser in a product-cycle story, but that framing likely overstates near-term earnings damage. The more important mechanism is mix: index options pricing can still offset softness in lower-value equity options, so the real risk is multiple compression if investors conclude listed derivatives growth has plateaued. If volatility-linked volumes stay strong into the next quarter, the stock can re-rate higher even without major estimate revisions.

The bigger second-order effect is competitive, not directly operational. Perpetual futures and prediction-market style products are a threat only if they pull away a sticky cohort of speculative flow; however, the listed options franchise still has advantages in collateral treatment, regulatory acceptance, and institutional distribution. That makes a full substitution story unlikely over days, but it becomes more relevant over 6-18 months if retail/crypto-native venues keep improving product design and liquidity.

Regulatory change is the cleanest catalyst, but it cuts both ways. A lower-friction market structure should help high-turnover brokers and cross-asset intermediaries more than exchanges with already-efficient economics, so IBKR is a cleaner beneficiary than CBOE if implementation advances. The contrarian angle is that the market may be over-focusing on headline competition while underestimating how much of CBOE’s cash flow is driven by durable hedging demand; the thesis breaks if index options ADV rolls over for two consecutive quarters or if revenue per contract deteriorates materially.

Key Decisions for Investors

• Keep CBOE on watch for a tactical long only on a post-headline washout; risk/reward improves near the low-$240s, but invalidate the idea if index options ADV decelerates again next quarter.
• Pair trade: long IBKR / short CBOE over the next 1-3 months to express lower-market-friction winners vs exchange take-rate risk; thesis works best if SEC structure changes gain traction.
• If already long CBOE, consider hedging with a short-dated call spread sale against the position into any rally toward prior resistance, since the near-term setup is likely range-bound unless estimates move up more than low-single-digits.
• Avoid chasing the prediction-markets narrative in CBOE until there is evidence of meaningful volume share; treat it as optionality, not an earnings driver, unless adoption data appears within 2-3 quarters.