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 step 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 like Polymarket and Kalshi, which typically offer future-style contracts tied to the outcome of events, Schwab’s product would function more like a binary option, where the contract would either pay out a fixed amount in cash or expire worthless depending on whether the S&P 500 closes above or below a specific 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 payout when their prediction gets close to the final outcome, even if the index doesn’t end up exactly at the target level.
