Charles Schwab Enters Prediction Markets With S&P 500 Binary Options

TLDR

• Charles Schwab is partnering with Cboe Global Markets to launch yes-or-no options contracts on the S&P 500
• The product works like a binary option — paying a fixed amount or expiring worthless
• A “Plus Zone” feature could offer partial payouts when predictions are close but not exact
• Schwab joins Coinbase and Robinhood, which have already launched prediction market products
• Prediction markets face ongoing regulatory scrutiny from Congress and the CFTC

Charles Schwab is preparing to enter the prediction markets space with a new product that lets customers bet on whether the S&P 500 will close above or below a set price.

The brokerage is partnering with Cboe Global Markets to launch the offering, which is expected to roll out to customers within months, according to a Wall Street Journal report published Friday.

Unlike platforms such as Polymarket and Kalshi, which offer futures-style contracts on a wide range of events, Schwab’s product will function as a binary option. The contract either pays a fixed cash amount or expires worthless, depending on the outcome.

Schwab and Cboe are also in talks to include a feature called the “Plus Zone.” This would allow traders to receive a partial payout when their prediction is close to the final result, even if the index doesn’t land exactly on the target.

The two companies have discussed expanding the product beyond the S&P 500 to other financial indexes and benchmarks. Schwab has indicated it will focus only on events with verifiable outcomes in financial markets, not politics or sports.

Schwab Follows Coinbase and Robinhood Into the Space

Schwab is not the first major financial firm to move in this direction. Coinbase and Robinhood have both launched prediction market products in recent months.

Kalshi and Polymarket, the two largest prediction market platforms, already offer event contracts tied to S&P 500 outcomes. The broader prediction market industry is projected by some to reach $1 trillion in annual volume by 2030.

Schwab had already been expanding into digital assets. In May 2026, the company launched spot Bitcoin and Ether trading for retail clients. The firm posted a net income of $2.5 billion in the first quarter of 2026.

Regulatory Questions Remain Open

Prediction markets continue to face scrutiny at both the state and federal level.

Several state gaming authorities have challenged whether platforms like Kalshi and Polymarket can legally offer sports-related event contracts. Members of Congress have also raised concerns about elected officials using nonpublic information to profit on these platforms.

A Republican lawmaker has proposed a ban on prediction market insider trading, though the proposal would not apply to White House officials.

The US Commodity Futures Trading Commission, under Chair Michael Selig, has taken the position that prediction market event contracts qualify as “swaps,” giving the agency exclusive regulatory authority.

Multiple legal cases involving Kalshi, Polymarket, and the CFTC are still being litigated.

Schwab’s entry into the space marks a shift for a traditional brokerage firm, bringing prediction market-style products into the mainstream retail investing world.

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