Cboe, one of the largest US derivatives exchanges, said it is entering the prediction market and reviving binary options on the S&P 500 index after abandoning them more than a decade ago, a move that brings it into 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 whether the US benchmark stock index crosses a certain level. This is close to what Polymarket and Kalshi already offer, although their offerings go beyond stock market forecasts 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 now make up about 30% of US options volume, highlighting the demand for fast, performance-based trades.
“Investors are increasingly seeking products that allow them to express a specific view of future events and market performance,” Milan Galik, CEO of Interactive Brokers, which carries the binary contracts, said in a statement.
The contracts will also be available at Charles Schwab later this year.
Second time
Cboe has tried this market before. 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listed binary options on the S&P 500 and Cboe Volatility Index in 2008, but they failed to attract interest and were withdrawn, with the last such contract expiring in 2017.
