Charles Schwab is working with Cboe Global Markets to launch all-or-nothing options contracts that allow customers to place yes-or-no wagers on the S&P 500’s performance. The product, expected to roll out in the coming months, marks the brokerage’s first entry into the prediction market sector, now crowded with crypto-native platforms like Polymarket and Kalshi.
Charles Schwab’s prediction market debut
To be clear, Charles Schwab is doing things a bit differently from what you see on platforms like Kalshi or Polymarket. While those sites mostly deal in futures-style event contracts, Schwab’s new prediction market works as a binary option. Basically, it’s a “yes or no” bet: you either get a set cash payout or the contract ends up worth nothing, all depending on if the S&P 500 hits a specific target price by the closing bell.
The brokerage is also exploring a feature tied to Cboe’s “Plus Zone,” which would allow partial payouts when predictions come close to the final outcome, even if the index doesn’t hit the exact target. This partial-payout structure could make the product more accessible to retail investors who might otherwise avoid the all-or-nothing risk of traditional binary options.
Competition heats up in prediction markets
Charles Schwab‘s move signals the rapid institutionalization of prediction markets. Kalshi’s institutional volume shot up by 800 percent in just half a year, and Polymarket is still seeing huge numbers.
Big names like Coinbase and Robinhood (and other crypto firms) have also introduced prediction market offerings, and firms like CME Group and Interactive Brokers have expanded into this space.
Schwab’s partnership with Cboe suggests the sector is moving toward mainstream financial infrastructure and away from purely crypto-native platforms. Interestingly, Schwab is focusing exclusively on objectively verifiable financial outcomes rather than political or sports events, avoiding the controversies that have sometimes plagued other prediction market operators.
