WSJ: Schwab Preparing Launch of S&P 500 Event-Based Options in Prediction Market Play

The planned offering would allow clients to take directional positions on index movements, as competitors like Coinbase and Robinhood ramp up their push into prediction markets.

Charles Schwab is reportedly collaborating with Cboe Global Markets to introduce a new type of options contract that lets investors place binary, yes-or-no bets on the S&P 500’s performance. The move would mark Schwab’s entry into the prediction markets space, according to a Wall Street Journal report.

The product could be rolled out to Schwab customers in the coming months, the report said, citing sources familiar with the matter.

Unlike traditional platforms such as Polymarket and Kalshi—which typically offer futures-style contracts tied to event outcomes—Schwab’s product would function more like a binary option, delivering a fixed payout if a specified condition is met or expiring worthless if it is not.

Schwab and Cboe are also evaluating a similar structure linked to Cboe’s “Plus Zone,” which would allow partial payouts when predictions come close to the final outcome, even if they miss the exact target.

The firms have discussed expanding the product beyond the S&P 500 to include other indices and financial benchmarks. However, Schwab is expected to focus on contracts tied to clear, verifiable financial outcomes, steering away from markets linked to politics, sports, or other real-world events.

If launched, Schwab would join a rapidly growing prediction markets sector. Platforms like Kalshi and Polymarket have attracted increasing interest from traders speculating on outcomes ranging from elections to economic data.

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