Cboe Global Markets has confirmed it is developing a new options-based product offering all-or-nothing payouts, a structure that could put the exchange in direct competition with prediction markets like Polymarket, Kalshi, Robinhood. and Coinbase.
Cboe, the leading options trading venue and famous for creating the Cboe Volatility Index (VIX), is in preliminary talks with brokerages and market makers about how the product will work, according to a previous WSJ report.
Although details are still being finalized, the goal is to use a traditional options wrapper to provide fixed-yield outcomes on yes-or-no event contracts, a person familiar with the situation told CoinDesk.
These types of derivatives – sometimes called binary options or fixed return contracts – allow traders to bet on a specific event occurring. If the event occurs, the contract pays a fixed amount of cash. Otherwise, it is set to zero. This payoff structure mirrors the mechanics of prediction markets, where users bet on everything from central bank movements to election results.
Cboe is no stranger to binary style options. In 2008, the exchange launched binary call options tied to the S&P 500 and the Cboe Volatility Index (VIX), allowing traders to bet on these indexes closing above a certain level. But the products struggled to gain traction and were eventually delisted.
This new initiative, however, is not intended to directly revive these earlier instruments, the person told CoinDesk. Instead, Cboe appears to be exploring ways to modernize the concept and attract a broader base of individual and institutional users. One of the main goals is to provide a better end-user experience, possibly with more intuitive market access or clearer contract terms.
If launched, the offering could carve out a place in a rapidly growing segment of the derivatives market. Platforms like Kalshi, a site regulated by the CFTC, already offer event-driven contracts on macroeconomic results. Polymarket, running on a blockchain, has seen increased volumes during election cycles and high-profile geopolitical events. Coinbase (COIN) also recently launched prediction market trading on its platform in partnership with Kalshi.
The exchange has not yet confirmed a timeline, and it remains unclear what specific events or outcomes the contracts would target.
