Cboe, one of the largest US derivatives exchanges, said it was entering the prediction market arena and relaunching binary options on the S&P 500 index after abandoning them more than a decade ago, a move that puts it in competition with platforms such as Kalshi and crypto-native Polymarket.
A binary option is a yes or no bet that pays a fixed amount if an outcome occurs, in this case if the benchmark U.S. stock index crosses a specific level. This is close to what Polymarket and Kalshi already offer, although their offerings go beyond stock market predictions to cover political and sports results as well as other topics.
The introduction follows Cboe’s success with same-day S&P 500 options, contracts that expire within hours and which now account for about 30% of U.S. options volume, drawing attention to the demand for fast, results-based trading.
“Investors are increasingly looking for products that allow them to express a specific point of view on future events and market outcomes,” Milan Galik, CEO of Interactive Brokers, which manages binary contracts, said in a statement.
Contracts will also be available on Charles Schwab later this year.
Second time
Cboe has already tried this market. It first listed binary options on the S&P 500 and Cboe Volatility Index in 2008, but they failed to attract interest and were withdrawn, with the last such contract expiring in 2017.
