Charles Schwab is working with Cboe Global Markets to bring prediction-style S&P 500 products to its customers, moving one of America’s largest brokerages into a sector already pulling in exchanges, fintech apps and crypto-native platforms.
The planned products are binary options tied to the S&P 500, giving traders a yes-or-no structure around whether the index finishes above or below a set level. The contracts would pay a fixed amount if the condition is met and nothing if it is not, making the product simpler than many traditional options strategies but still tied to market risk.
Schwab is expected to make the contracts available in the coming months. The move puts the brokerage into the same broader prediction-market race as Robinhood, Coinbase, Polymarket and Kalshi, though Schwab’s first push is focused on finance-linked outcomes rather than politics, sports or entertainment.
Cboe Brings Prediction Trading Into Index Options
Cboe has been building a framework for prediction-style products around index markets. Its prediction markets framework is designed to move beyond simple all-or-nothing outcomes by adding a partial-payout feature when a trader is directionally right but not exact.
That structure gives Schwab a cleaner route into prediction markets than crypto-native event contracts. Rather than asking users to trade broad social or political outcomes, the product stays inside familiar market territory: the S&P 500, index levels, defined payouts and brokerage distribution.
The design also keeps Schwab closer to traditional options infrastructure. Cboe already runs major index-options markets, including SPX and related retail products. Adding simplified yes-or-no contracts gives brokerages a way to serve demand for event-style trading without sending users to dedicated prediction-market platforms.
Wall Street Moves Toward Event-Style Trading
Prediction markets have moved quickly from niche crypto products into mainstream finance. Polymarket built the crypto-native version around onchain outcome markets, while Kalshi pushed the regulated U.S. event-contract model. Robinhood and Coinbase have also explored event-style contracts as customer demand for simple directional products grows.
The same expansion has brought more legal and political pressure. Gaming groups have pushed lawmakers to ban sports prediction markets in the CLARITY Act, while Kentucky recently sued Kalshi and Polymarket over claims that sports event contracts function as unlicensed sportsbooks.
Schwab’s entry sits on the other side of that divide. S&P 500 contracts are tied to financial-market outcomes, not game results or cultural events, giving large brokerages a safer lane as regulators challenge prediction markets that look closer to gambling.
Brokerages Chase Simpler Market Products
Schwab’s move shows how prediction-market mechanics are being absorbed into ordinary brokerage platforms. The appeal is not only speculation. A yes-or-no S&P 500 contract gives users a defined-risk way to trade a market view without building a multi-leg options position or buying leveraged ETFs.
The product could also change how retail traders think about index exposure. Instead of asking whether the S&P 500 will rise enough to justify buying calls or selling spreads, users can trade a direct outcome around a closing level with a capped payout.
The confirmed structure remains limited to Schwab working with Cboe on S&P 500-linked binary options, expected availability in the coming months, and a framework built around fixed payouts with a possible partial-payout feature. That places Schwab inside the prediction-market boom, but in a more traditional Wall Street wrapper than Polymarket or Kalshi.
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