Key Facts

• Charles Schwab is working with Cboe Global Markets to launch a new type of options contract that would allow customers to make yes-or-no wagers on the performance of the S&P 500, marking the brokerage's first move into prediction markets.
• The planned product will function like a binary option, paying a fixed amount or nothing based on whether the S&P 500 closes above or below a preset level, with rollout to Schwab customers expected in the coming months.
• Schwab and Cboe are exploring related contracts using Cboe's Plus Zone feature, which would allow traders to receive a partial payout when their prediction is close to the final outcome, even if the index does not finish exactly at the target level.
• The companies have discussed expanding the lineup beyond the S&P 500 to other market indexes or financial benchmarks, but Schwab plans to focus on events with objectively verifiable outcomes in financial markets rather than contracts tied to politics, sports, or other real-world events.
• The launch would make Schwab the latest entrant in a rapidly expanding prediction markets industry, following platforms such as Kalshi and Polymarket, and crypto and retail trading firms like Coinbase and Robinhood.