Cboe Global Markets confirmed it is developing a new option-based product offering all-or-nothing payouts, a structure that could put the exchange in direct competition with prediction markets such as Polymarket, Kalshi, Robinhood and Coinbase.
Cboe, the primary venue for options trading and famous for creating the Cboe Volatility Index (VIX), is in early talks with brokers and market makers about how the product would work, according to a previous WSJ report.
While the details are still being finalized, the goal is to use a traditional option wrapper to deliver fixed return results on yes-or-no style event contracts, a person familiar with the situation told CoinDesk.
These types of derivatives – sometimes referred to as binary options or fixed return contracts – allow traders to bet on whether a specific event will occur. If the event occurs, the contract pays out a fixed cash amount. If not, it sets to zero. This payout structure reflects the mechanics of prediction markets, where users bet on everything from central bank moves to election results.
Cboe is no stranger to binary style options. In 2008, the exchange launched binary call options linked to the S&P 500 and the Cboe Volatility Index (VIX), allowing traders to bet on whether these indices would close above a certain level. But the products struggled to gain traction and were eventually delisted.
However, this new initiative is not intended as a direct relaunch of the previous instruments, the person told CoinDesk. Instead, Cboe appears to be exploring ways to modernize the concept and appeal to a broader base of retail and institutional users. A key focus is to deliver a better end-user experience, possibly with more intuitive market access or clearer contract terms.
If launched, the offering could create space in a fast-growing segment of the derivatives market. Platforms such as Kalshi, a CFTC-regulated venue, already offer event-based contracts on macroeconomic performance. Polymarket, which operates on a blockchain, has seen increasing volumes during election cycles and high-profile geopolitical events. Coinbase (COIN) also recently launched prediction markets trading on its platform in partnership with Kalshi.
The exchange has yet to confirm a timeline, and it remains unclear what specific events or outcomes the contracts will target.
