Charles Schwab is partnering with Cboe Global Markets to offer yes-or-no options contracts on the S&P 500. The move marks the brokerage's entry into prediction markets, with rollout expected in the coming months.
The planned contracts would function like binary options. Customers could receive a fixed payout or nothing based on whether the S&P 500 closes above or below a preset target level.
Schwab and Cboe are also discussing a feature called Plus Zone that would allow partial payouts when predictions are close to the outcome. The firms may expand the offering to other financial benchmarks.
The brokerage intends to limit contracts to events with objectively verifiable financial outcomes. It will avoid areas such as politics or sports.
This launch would position Schwab alongside firms including Coinbase and Robinhood that have already introduced prediction market products.
