Schwab Partners with Cboe to Launch Binary Options on S&P 500, Entering Prediction Markets
Charles Schwab is partnering with Cboe Global Markets to introduce binary options contracts tied to the S&P 500 index, marking its first foray into prediction markets. The product will pay a fixed amount if the index closes above or below a preset level, otherwise expires worthless. Rollout to Schwab customers is expected in the coming months. Schwab and Cboe are also exploring similar contracts using Cboe's 'Plus Zone' feature for partial payouts, and may expand to other financial benchmarks. Unlike platforms like Polymarket and Kalshi, Schwab will focus on objectively verifiable financial outcomes, avoiding politics, sports, or real-world events. This move follows growing interest in prediction markets, with Coinbase and Robinhood also launching similar offerings. The partnership highlights traditional brokerages embracing event-driven trading products.
Key facts
- Schwab partners with Cboe to offer binary options on S&P 500.
- Contract pays fixed amount if index closes above/below target.
- Rollout to Schwab customers expected in coming months.
- Cboe 'Plus Zone' feature may allow partial payouts for near-misses.
- Schwab avoids political or sports contracts, focusing on financial benchmarks.