CFTC approves Rothera's Tesla earnings contract as a swap, opening a CFTC route for company KPI event contracts

What the CFTC approved

On 27 October 2026 the Commission issued an Order Approving Rothera Exchange and Clearing LLC KPI Swap. Rothera, a designated contract market (DCM), had asked for approval under CEA section 5c(c)(4) and Commission Regulation 40.3 in a submission dated 21 October 2026. Under CEA section 5c(c)(5)(B), the Commission must approve a new contract submitted this way unless it finds that the contract violates the CEA or the Commission’s regulations.

The contract is titled “Will Tesla report Q4 2026 Adjusted EPS greater than $0.65?”. Rothera first filed on 15 October 2026 for a Q3 2026 version; the order rests on the 21 October submission, which covers Q4 2026. According to that submission and the order:

• Underlying. Tesla’s official non-GAAP diluted EPS (“Adjusted EPS”) for the quarter ending 31 December 2026, as reported in its Q4 2026 earnings release and investor update furnished on Form 8-K. The first official figure is used, and later revisions are ignored. The annual figure does not count.
• Settlement sources. In order of priority: the SEC’s EDGAR database, Tesla’s investor relations website and federal financial regulators, followed by a list of news organisations.
• Terms. $1 notional, a $0.01 minimum tick, and trading only between $0.01 and $0.99. Trading is available at all times outside maintenance windows announced in advance. Expiration is at 10:00am CT on the expiration date.
• Position accountability. 5,000,000 contracts for participants and 25,000,000 for market makers.
• Liquidity and surveillance. At least one market maker will provide liquidity. Surveillance runs on Eventus Validus.
• Insider restrictions. Tesla’s directors and officers are barred from trading the contract, as are Tesla employees involved in preparing, reviewing, approving or releasing its financial results or subject to its quarterly trading blackout. The bar extends to employees, contractors, consultants, auditors, lawyers, advisers and other service providers of Tesla or of any Source Agency who may possess material nonpublic information about the underlying, and to the household and immediate family members of all of these.

The order says the contract will be “listed for trading on Rothera, and made available for clearing, as a swap”. Rothera has not announced a listing date.

The swap analysis

Rothera asked for approval under prong (ii) of the CEA swap definition. That prong covers payments that depend on an event or contingency “associated with a potential financial, economic, or commercial consequence”. The order goes further. It finds the contract may also be a swap under prong (i), as a binary option on an “excluded commodity”, and under prong (iv), as an instrument “commonly known to the trade as a swap”. For prong (iv), it cites KalshiEX’s self-certified contracts on Tesla deliveries and Netflix subscribers from January 2024.

On the boundary with the SEC, the order finds that the contract does not meet any of the exclusions from the swap definition. It adopts Rothera’s description of a contract that “pays on a reported statistic rather than on a security or its value”. It also says a KPI disclosure does not “directly affect” the issuer’s financial statements: “it reports them”. The order says this conclusion “applies with greater force” to the non-financial KPIs referenced in Rothera’s submission, such as vehicle deliveries.

The order’s findings “address solely” this contract and similarly structured contracts on the other KPIs named in Rothera’s submission. The Commission says it is “cognizant” that similar products on the same KPIs “may be structured in different ways and be subject to SEC jurisdiction”. The order also notes that the joint CFTC–SEC request for comment on the line between swaps and security-based swaps (91 FR 37873, 24 June 2026) remains pending.

In a statement on 27 October 2026, CFTC Chairman Michael S. Selig said the approval “does not address — and does not foreclose — SEC jurisdiction over KPI contracts based on the same underlying KPIs”. He added: “I join SEC Chairman Atkins in celebrating the end of decades-long jurisdictional ‘turf wars’” between the two agencies.

The SEC side

On 13 October 2026 the SEC approved Cboe Exchange’s binary options on issuer KPIs as standardised securities options (Release No. 34-106659). The SEC order says it is “cognizant that similar products with the same underlying KPIs as the binary options described in this order may be structured in different ways and be subject to CFTC jurisdiction”. In his statement that day, Chairman Paul S. Atkins said the approval “does not address—and does not foreclose—CFTC jurisdiction over KPI contracts based on the same underlying KPIs as those contemplated in the approval order structured to fall under the CFTC’s jurisdiction”. Rothera’s submission quotes that passage.

The Cboe options are set to clear through Cboe Clear U.S. We have covered the SEC approval, Cboe Clear U.S.’s temporary registration and FINRA’s binary-options rule changes.

What Rothera plans

In a statement dated 28 October 2026, Rothera said the approval “paves the way” for further KPI swaps in three categories:

• company financial reporting: earnings, sales, margins and expenses
• platform usage: active users, customers, flights and trips
• production metrics: units produced and delivered

Rothera said its “gradual rollout of KPI contracts” begins in autumn 2026, starting with platform usage and production contracts, and that it is targeting initial listings ahead of the relevant companies’ quarterly reporting dates. Chief executive Tom Chippas said the contracts allow market participants “a more precise way to manage risk and exposure to specific business outcomes and performance”. Rothera’s submission says it intends to self-certify further KPI contracts under Regulation 40.2, including as a class of swaps under Regulation 40.2(d), and gives Tesla’s Model 3/Y production and Supercharger connectors as examples.

Rothera says it was founded as a joint venture between Robinhood and Susquehanna International Group. Robinhood’s third-quarter results, furnished on 27 October 2026, said Rothera “reached over $100 million in annualized revenues in its first full quarter of operation, with over 6.4 billion contracts traded since launch”. Robinhood also reported event contracts revenue of $173 million for the quarter. These are company figures and have not been independently verified.

Why it matters

The two orders give issuer KPIs two separate US routes. On the SEC side, a binary option listed on a securities exchange and set to clear through Cboe Clear U.S. On the CFTC side, an event contract swap on a DCM, in this case cleared by Rothera’s registered derivatives clearing organisation. Each agency has said that its approval does not foreclose the other’s jurisdiction over differently structured products on the same metrics. Neither has said where the line falls, and the joint request for comment on that question remains pending.

The CFTC order relies on a broad reading of “swap”. The same question is before the Commission in its proposal to treat event contracts as swaps, on which comments close on 18 November 2026, and in our earlier coverage.

What we are watching

• A listing date for the Tesla contract, and Rothera’s first self-certified KPI contracts under Regulation 40.2.
• Cboe’s listing date for its binary KPI options.
• Comments on the CFTC’s swap-definition proposal before the 18 November 2026 deadline, and any action on the joint CFTC–SEC request for comment.

This article is for information only and is not investment advice.