Case: 25-7187, 02/17/2026, DktEntry: 37.2, Page 26 of 41
An event contract is also a binary option. See 17 C.F.R. 1.3 (defining commodity option). A binary option is a “type of option whose payoff is either a fixed amount or zero. For example, there could be a binary option that pays $100 if a hurricane makes landfall in Florida before a specified date and zero otherwise.” CFTC Futures Glossary, https://www.cftc.gov/LearnAndProtect/Advis oriesAndArticles/CFTCGlossary/index.htm#B (last visited Feb. 17, 2026). Commodity option transactions must be conducted in compliance with the CEA and the Commission’s regulations related to swaps. 17 C.F.R. 32.2(a); see also Commodity Options, 77 Fed. Reg. 25320, 25321 n.6 (Apr. 27, 2012) (“the swap definition . . . includes options . . . (whether or not traded on a DCM)”). Importantly, when Congress has limited the Commission’s jurisdiction over derivatives it has only done so by expressly embedding narrow exclusions in the statutory commodity definition itself ( i.e ., onions and movie box office receipts). 10 Here, Congress wrote specific, enumerated exclusions into the definition of swap in § 1a(47)(B), confirming that when it intended to limit the Commission’s jurisdiction, it did so expressly, not by inviting courts or states to create additional, atextual carve-outs. 11
10 See 7 U.S.C. § 1a(9). 11 7 U.S.C. § 1a(47)(B) (excluding, inter alia, physically settled forward transactions, certain insurance and consumer arrangements, and other ordinary- course commercial agreements).
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