Charles Schwab is working with Cboe Global Markets to offer binary options contracts that allow customers to place yes-or-no wagers on the S&P 500, marking the brokerage’s first move into prediction markets.
Unlike the futures-style contracts listed on platforms such as Kalshi and Polymarket, these binary options are structured as options — but the mechanics are functionally comparable: a fixed cash settlement goes to the holder if the S&P 500 closes above or below a predetermined level, and nothing at all if it does not
Schwab plans to make the contracts available to customers in the coming months. A companion product built around a Cboe feature called the “Plus Zone” is also in the works, according to the The Wall Street Journal; rather than an all-or-nothing result, that contract would deliver a partial payout to traders whose directional call was roughly correct but whose target price was not met precisely. The two companies have also discussed extending the product lineup to other market indexes or financial benchmarks, though Schwab plans to limit its offerings to events with verifiable outcomes in financial markets, steering clear of contracts tied to politics, sports, or entertainment.
Cboe announced in March a prediction markets framework built around a Mini S&P 500 Index contract, with a planned launch in the second quarter of 2026. Under Cboe’s model, contracts can deliver three potential outcomes: no payout, a partial payout within a defined range, or a full $100 payout. The product is listed on Cboe Options Exchange and centrally cleared by OCC, the company said. “As the leader in retail options trading and a close partner of Cboe, we are pleased to see Cboe continue to innovate in the financial markets and look forward to continually enabling new instruments as we see the client demand,” James Kostulias, head of trading services at Charles Schwab, said in a statement.