Event Contracts vs Stock Options

Event contracts vs stock options is a payoff question before it is anything else: both can express the same view on the same stock by the same date, and the two pay on entirely different rules. An event contract is binary. It settles at $1.00 per contract if the stated condition is true at settlement and at $0.00 if it is not. A listed call option has no ceiling above its strike, and its buyer pays premium up front for that open end.

This page works one matched pair all the way through: a YES contract at $0.70 against the call vertical that costs the same money and caps at the same place. For the pricing intuition, what an event contract price says about probability covers the read, and how event contracts settle covers the resolution step.

Event contracts vs stock options: the same view, two tickets

Take a stock trading at $100 and a date about six weeks out. The view is plain: the stock finishes above $100.

Ticket one is 1,000 YES contracts at $0.70 on the condition that the stock closes above $100 on that date. Cash committed, $700. Settlement, $1,000 if the condition is true and $0 if it is false.

Ticket two is two call vertical spreads at a $3.50 debit each. A vertical spread pairs a long option with a short option of the same type and expiry at a different strike: long the $100 call, short the $105 call. Each spread covers 100 shares, the pair costs $700, and it is worth at most $1,000. Buying and selling call options covers the single-leg version.

Same cash. Same maximum payout. Same expiry date. Everything after that differs.

Payoff shape: par or zero against a linear ramp

The panel below values both tickets at closing prices from $95 to $110. None of it comes from market data. It is the arithmetic of the two payoffs, drawn on one axis.

SELECT
    concat('$', toString(toDecimal32(px, 2)))                       AS close_price,
    if(px > 100, 1000, 0)                                           AS yes_contract_dollars,
    toUInt32(round(200 * least(greatest(px - 100, 0), 5)))          AS call_vertical_dollars
FROM
(
    SELECT 95 + arrayJoin(range(31)) * 0.5 AS px
)
ORDER BY px

The YES line steps from zero to par the moment the condition is true, then flattens: a $101 close and a $110 close both pay $1000. The vertical ramps instead. At $101 it is worth $200 against the $700 committed, and it does not recover the outlay until $103.5, where it prints $700. From $105 upward the two tickets are identical at $1000.

The stretch between $100 and $103.5 is the part a reader feels. The option position can be right on direction and still hand money back. The binary pays on the stated condition alone.

One wrinkle worth pinning: that condition is a closing condition. A stock can trade above $100 all afternoon and print $99.80 at the bell, which pays zero. The distance between touching a level and finishing above it is its own subject, and probability of touch versus probability of finishing in the money takes it apart.

What the premium on an at-the-money call has to beat

Premium is the price of the option. A call struck at the money returns that premium at expiry only once the stock clears the strike by what you paid for it. The panel measures the hurdle on real contracts: calls within 2% of the share price with 20 to 45 days of life left, priced as a percent of the stock.

SELECT
    underlying_symbol                                                               AS symbol,
    round(avg(toFloat64(option_close) / toFloat64(underlying_close)) * 100, 2)      AS atm_call_premium_pct,
    round(avg(implied_volatility * sqrt(toFloat64(days_to_expiry) / 365)) * 100, 2) AS expected_move_pct
FROM global_markets.options_greeks
WHERE date >= today() - 60
  AND underlying_symbol IN ('AAPL', 'MSFT', 'NVDA', 'SPY', 'AMD', 'KO')
  AND lower(option_type) LIKE 'c%'
  AND iv_converged = 1
  AND volume > 0
  AND days_to_expiry BETWEEN 20 AND 45
  AND abs(toFloat64(strike_price) / toFloat64(underlying_close) - 1) < 0.02
GROUP BY symbol
ORDER BY atm_call_premium_pct DESC

Over the last 60 days, AMD carried the steepest hurdle in the group at 6.72% of the share price, against 1.63% for SPY. The second series is the one standard deviation move those same contracts put on the stock over their own remaining life, 16.43% in the top row, read from implied volatility. Implied volatility is the annualized move an option's price implies for the stock underneath it.

A YES contract has no equivalent hurdle. Its price is its risk, and its payout is fixed at par.

Where the greeks live, and where there are none

Delta is the rate at which an option's value moves for a $1 move in the stock. It is not a constant. The panel bins near-dated calls on four liquid names by how far the strike sits from the share price, then averages delta in each bin.

SELECT
    concat(toString(bucket_low), '% to ', toString(bucket_low + 2), '%') AS moneyness,
    round(avg(call_delta), 3)                                            AS avg_call_delta
FROM
(
    SELECT
        toInt32(floor((toFloat64(strike_price) / toFloat64(underlying_close) - 1) * 50) * 2) AS bucket_low,
        delta                                                                                AS call_delta
    FROM global_markets.options_greeks
    WHERE date >= today() - 30
      AND underlying_symbol IN ('AAPL', 'MSFT', 'NVDA', 'SPY')
      AND lower(option_type) LIKE 'c%'
      AND iv_converged = 1
      AND volume > 0
      AND days_to_expiry BETWEEN 20 AND 45
      AND abs(toFloat64(strike_price) / toFloat64(underlying_close) - 1) < 0.10
)
GROUP BY bucket_low
ORDER BY bucket_low

Delta runs from 0.89 in the -10% to -8% bin, where the strike sits below the share price, down to 0.081 in the 8% to 10% bin above it. That curve is what an options desk manages all session: one contract behaves like a different amount of stock as the stock moves, and the sensitivity itself keeps shifting with time and volatility. An event contract carries one price between $0 and $1 and one condition. There is no delta to hedge and no volatility mark to carry.

One real call, held from pick to expiry

The pick below is mechanical. On the last session on or before May 15, 2026, take the AAPL call closest to the money with 25 to 60 days of life and real traded volume, then follow that single contract every session it traded through expiry. Both series are indexed to the first session, since the stock and the option live on very different price scales.

WITH
    start_day AS
    (
        SELECT max(date) AS d
        FROM global_markets.options_greeks
        WHERE underlying_symbol = 'AAPL'
          AND date <= '2026-05-15'
    ),
    pick AS
    (
        SELECT ticker
        FROM global_markets.options_greeks
        WHERE underlying_symbol = 'AAPL'
          AND date = (SELECT d FROM start_day)
          AND lower(option_type) LIKE 'c%'
          AND iv_converged = 1
          AND volume > 0
          AND days_to_expiry BETWEEN 25 AND 60
        ORDER BY abs(toFloat64(strike_price) / toFloat64(underlying_close) - 1) ASC, volume DESC
        LIMIT 1
    ),
    base AS
    (
        SELECT
            argMin(toFloat64(underlying_close), date) AS spot_0,
            argMin(toFloat64(option_close), date)     AS call_0
        FROM global_markets.options_greeks
        WHERE ticker IN (SELECT ticker FROM pick)
          AND date >= (SELECT d FROM start_day)
          AND volume > 0
          AND toFloat64(option_close) > 0
    )
SELECT
    toString(g.date)                                               AS date,
    round(100 * (toFloat64(g.underlying_close) / b.spot_0 - 1), 2) AS stock_change_pct,
    round(100 * (toFloat64(g.option_close) / b.call_0 - 1), 2)     AS call_change_pct
FROM global_markets.options_greeks AS g
CROSS JOIN base AS b
WHERE g.ticker IN (SELECT ticker FROM pick)
  AND g.date >= (SELECT d FROM start_day)
  AND g.volume > 0
  AND toFloat64(g.option_close) > 0
ORDER BY g.date

Across the 23 sessions from 2026-05-15 to 2026-06-17, the stock ended -0.92% from where the trade started while the contract itself ended -94.41%. Read the two lines together rather than separately. The call line is the stock line levered and decayed, and the width of the gap between them on any given day is premium at work. A binary on the same stock would have printed one of two numbers on that final date, with nothing in between.

Early exercise, assignment, and what you post up front

Listed US equity options are American style: the holder can exercise any session up to expiry, and a short leg can be assigned whenever the holder on the other side chooses. Assignment clusters around ex-dividend dates, which ex-dividend dates and options walks through. An event contract has no exercise step at all. It resolves on the stated condition at the stated time and pays cash, the settlement style covered in cash settled versus physical delivery.

Collateral splits the same way. On the event contract the two sides together post the full $1.00 per contract before the position exists, and the maximum loss is the price paid, nothing beyond it. Event contract collateral and max loss has the mechanics. The option buyer pays premium up front, while the short $105 call in the vertical is margined by the broker against the long $100 call, with the $5 width standing as the backstop.

Who stands behind each contract

Listed equity options trade on SEC-registered exchanges, and every contract is cleared by the Options Clearing Corporation, which becomes the counterparty to both sides. US event contracts trade on a designated contract market, a venue registered with the Commodity Futures Trading Commission, and clear through a registered derivatives clearing organization. In March 2026 the CFTC published an advance notice of proposed rulemaking on event contracts, and the agency has asserted exclusive jurisdiction over them. That rulemaking is open as of September 2026. Nothing here forecasts where it lands. The structural point holds in any case: two instruments written on the same stock, sitting under different regulators and different rulebooks.

FAQ

Is an event contract the same as a binary option?

The payoff shape is the same, par or zero on a stated condition. The venue and the rulebook are not. A US event contract trades on a CFTC-regulated designated contract market and clears through a registered clearing organization, while the offshore binary options that US regulators warned retail traders about for years sat outside US registration entirely.

Do event contracts have greeks?

No. A contract has a price and a condition, with no delta to hedge and no volatility surface behind it. Its price still moves with the odds and with time left to settlement, which is a different thing from carrying sensitivities a desk has to rebalance against the underlying stock.

Can an event contract be exercised early?

No. There is no exercise step. The position resolves on the stated condition at the stated time. Listed US equity options work the other way: the holder can exercise any session before expiry, and the short side can be assigned without warning.

Which one pays more when the stock barely moves?

On the worked pair above, a close just over the threshold pays the YES contract par while the call vertical is worth a fraction of its maximum. Push the close far enough above the upper strike and the two pay the same amount. The binary's edge sits in the small-move region, and the flat ceiling above is what pays for it.

Every panel here ships with the exact SQL underneath it, expand one to see precisely which contracts were counted. The same comparison, set against your own threshold and your own date, is the kind of question you can ask in plain English on the Strasmore terminal.