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Cris Tolomia
Mon, June 22, 2026 astatine 7:21 AM CDT 2 min read
Charles Schwab is moving with Cboe Global Markets to connection binary options contracts that let customers to spot yes-or-no wagers connected the S&P 500, marking the brokerage's archetypal determination into prediction markets.
Unlike the futures-style contracts listed connected platforms specified arsenic Kalshi and Polymarket, these binary options are structured arsenic options — but the mechanics are functionally comparable: a fixed currency colony goes to the holder if the S&P 500 closes supra oregon beneath a predetermined level, and thing astatine each if it does not. Schwab plans to marque the contracts disposable to customers successful the coming months.
A companion merchandise built astir a Cboe diagnostic called the "Plus Zone" is besides successful the works, according to the The Wall Street Journal; alternatively than an all-or-nothing result, that declaration would present a partial payout to traders whose directional telephone was astir close but whose people terms was not met precisely. The 2 companies person besides discussed extending the merchandise lineup to different marketplace indexes oregon fiscal benchmarks, though Schwab plans to bounds its offerings to events with verifiable outcomes successful fiscal markets, steering wide of contracts tied to politics, sports, oregon entertainment.
Cboe announced successful March a prediction markets model built astir a Mini S&P 500 Index contract, with a planned motorboat successful the 2nd 4th of 2026. Under Cboe's model, contracts tin present 3 imaginable outcomes: nary payout, a partial payout wrong a defined range, oregon a afloat $100 payout. The merchandise is listed connected Cboe Options Exchange and centrally cleared by OCC, the institution said.
"As the person successful retail options trading and a adjacent spouse of Cboe, we are pleased to spot Cboe proceed to innovate successful the fiscal markets and look guardant to continually enabling caller instruments arsenic we spot the lawsuit demand," James Kostulias, caput of trading services astatine Charles Schwab, said successful a statement.
The determination marks a notable reversal for CEO Rick Wurster, who had been openly skeptical of the category. Wurster drew a favoritism betwixt fiscal lawsuit contracts and those pegged to sports oregon entertainment, informing that the second risked eroding the bound betwixt investing and gambling; arsenic precocious arsenic December, helium said that prediction markets ranked debased connected Schwab's priorities. At the aforesaid time, helium near the doorway open, acknowledging that competitory unit from rivals could yet unit the firm's hand.
Schwab's determination follows rival brokerages into the space. Both Robinhood and Interactive Brokers person already introduced lawsuit contracts to their customers, according to Reuters. Schwab has besides precocious been expanding into different plus classes: the brokerage launched nonstop bitcoin and ether trading for customers earlier this twelvemonth done a caller work called Schwab Crypto.
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