Charles Schwab is working with Cboe Global Markets to launch a new type of options contract that will 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 be rolled out to Schwab clients in the coming months, the Journal reported, citing people familiar with the matter.
Unlike traditional prediction market platforms like Polymarket and Kalshi, which typically offer futures-like contracts tied to the outcome of events, Schwab’s product would function more like a binary option, where 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 the “Plus Zone,” which would allow traders to receive a partial payout when their prediction is close to the final outcome, even if the index doesn’t end exactly at the target level.
