Schwab Eyes Prediction Market Push With S&P 500 Event-Driven Options: WSJ

The proposed product would enable clients to take directional bets on index movements, as firms like Coinbase and Robinhood continue to expand their presence in the space.

Charles Schwab is reportedly collaborating with Cboe Global Markets to introduce a new options product that allows investors to place yes-or-no bets on the performance of the S&P 500. According to a Wall Street Journal report, this would mark Schwab’s entry into the prediction markets segment.

The offering is expected to be made available to Schwab clients in the coming months, the report said, citing sources familiar with the plans.

Unlike traditional prediction market platforms such as Polymarket and Kalshi—which typically offer futures-style contracts tied to event outcomes—Schwab’s product would resemble a binary option. These contracts would either pay a fixed cash amount or expire worthless, depending on whether the S&P 500 closes above or below a predefined level.

Schwab and Cboe are also exploring a similar product linked to a Cboe feature known as the “Plus Zone.” This mechanism would allow traders to receive partial payouts if their predictions come close to the final result, even if the index does not hit the exact target.

The companies have also considered broadening the offering beyond the S&P 500 to include other indices or financial benchmarks. However, Schwab is expected to focus strictly on contracts tied to clearly measurable financial outcomes, avoiding markets linked to politics, sports, or other real-world events.

If launched, Schwab would join a rapidly growing prediction markets industry. Platforms like Kalshi and Polymarket have seen increasing demand from traders looking to speculate on events ranging from elections to economic indicators.

Meanwhile, crypto and retail brokerage firms are also entering the space, with both Coinbase (COIN) and Robinhood (HOOD) recently rolling out their own prediction market products.