The proposed offering would enable clients to place directional bets on index movements, as rivals like Coinbase and Robinhood deepen their push into the segment.
Charles Schwab is said to be teaming up with Cboe Global Markets to introduce a new class of options contracts that let investors make binary, yes-or-no bets on the S&P 500’s performance. According to a Wall Street Journal report, the move would mark Schwab’s debut in prediction markets.
The product could be rolled out to Schwab clients in the coming months, the report noted, citing sources familiar with the plans.
Unlike conventional prediction platforms such as Polymarket and Kalshi—which typically rely on futures-style contracts tied to event outcomes—Schwab’s approach would resemble a binary option. The contract would either deliver a fixed payout or expire worthless depending on whether the S&P 500 finishes above or below a preset level.
Schwab and Cboe are also evaluating a similar structure linked to Cboe’s “Plus Zone” feature, which would allow partial payouts if predictions come close, even without hitting the exact target.
The firms have discussed expanding the offering beyond the S&P 500 to include other indices and financial benchmarks. However, Schwab is expected to focus strictly on contracts tied to clear, verifiable financial outcomes, avoiding areas such as politics or sports.
If launched, Schwab would become the latest entrant in the fast-growing prediction markets space. Platforms like Kalshi and Polymarket have seen rising demand from traders speculating on outcomes ranging from elections to economic data.
Meanwhile, crypto and retail brokerages are also moving into the category, with Coinbase (COIN) and Robinhood (HOOD) recently launching their own prediction market offerings.
