Charles Schwab is working with Cboe Global Markets to launch a new type of options contract that would allow clients to make yes or no bets on the performance of the S&P 500, marking the brokerage’s first move into prediction markets, according to a Wall Street Journal report.
The feature is expected to roll out to Schwab customers in the coming months, the Journal reported, citing people familiar with the matter.
Unlike traditional prediction market platforms such as Polymarket and Kalshi, which typically offer futures contracts tied to the outcome of events, Schwab’s product would operate more like a binary option, in which the contract would pay a fixed amount of cash or expire worthless depending on whether the S&P 500 closes above or below a specified target price.
Schwab and Cboe are also in talks to offer a similar product tied to a Cboe feature known as “Zone Plus,” which would allow traders to receive a partial payment when their prediction is close to the final outcome, even if the index doesn’t finish exactly at the target level.
