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I’m going to tell you about a business model that’s so good, it almost feels unfair.
We’re talking about Cboe Global Markets (CBOE) — the exchange that helped build the modern options market. If you’re newer to trading, CBOE sits at the center of the options world. When I say this might be one of the most beautiful businesses anywhere, I mean it.
Most companies face endless challenges just to operate. If you’re making cars, you’re dealing with regulations, tariffs, supply chains, and labor. If you’re Nvidia (NVDA), you’re navigating chip shortages, geopolitics, and a booming AI industry.
But CBOE? They create option contracts — products traders actively want — at essentially zero cost. Every time one of those contracts trades, they collect a fee. That’s the entire machine.
They keep innovating. When traders demanded shorter-dated trades, CBOE launched 0DTE options. That single product line sent revenue soaring.
When the market wanted more flexibility, they expanded into three-times-a-week options on names like Broadcom (AVGO). Again, almost no cost to create, yet powerful fee generation.
They keep producing products the market wants, and every one of them feeds into their fee engine.
A Moat You Can’t Compete With
What makes this model even more impressive is the moat: Nobody is going to build a competing weekly or daily option product that’s as efficient or as trusted as CBOE. They own this space.
Their product is the marketplace itself — traders tell them what they want, and CBOE turns that into a contract that generates revenue every time it changes hands.
Options volume has exploded over the past few years, and demand for 0DTE options has become one of the biggest drivers of revenue growth. Traders want precision, speed, and flexibility, and CBOE delivers it.
Many assume rising volume is purely retail, but that’s only part of the story. The bigger takeaway is a business with a bottom line that keeps getting stronger.
Why I’m Long CBOE
Full disclosure: I’m long Cboe Global Markets (CBOE), and I like it a lot better than competitors like Chicago Mercantile Exchange (CME) and Intercontinental Exchange (ICE).
While CME is the king of S&P 500 futures, CBOE holds the crown for index options on products like the SPX through an exclusive license — a massive moat that allows them to spin up new option products whenever the market wants them.
ICE is fine, but if I had to do it again, I probably wouldn’t have bought it. CBOE is simply in a league of its own.
This business quietly collects fees every single day. I love the insurance business. I love hard money loans. But this? It stands above nearly every business model I’ve seen. It’s almost too good.
When deciding where to allocate capital, don’t just analyze the chart. Look at the business model. Look at the moat. Look at how cheaply it can grow compared to everyone else.
That’s where the real edge is.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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Disclaimer: We develop tools and strategies to the best of our ability, but we can’t guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. On live trades, the result is a 78% win rate from 4/05/23 through 2/20/26, with an average return per trade (winners and losers included) of 19.88%, a 6-day average hold time, and an average winner of 52.76%.
