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Schwab to join prediction markets race with S&P 500 event-based options: WSJ
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Charles Schwab is working with Cboe Global Markets to launch a new type of options contract that would allow customers to make yes-or-no wagers on the performance of the S&P 500, marking the brokerage's first move into prediction markets, according to a Wall Street Journal report.
Key facts
- In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024
- The companies have even discussed expanding the lineup beyond the S&P 500 to other market indexes or financial benchmarks, according to the report
- The feature is expected to roll out to Schwab customers in the coming months, the Journal reported, citing people familiar with the matter
- The launch would make Schwab the latest entrant in a rapidly expanding prediction markets industry
Summary
Charles Schwab is partnering with Cboe Global Markets to offer new yes-or-no options contracts on the S&P 500, marking the brokerage’s first move into prediction markets. The planned product will function like a binary option, paying a fixed amount or nothing based on whether the index closes above or below a preset level, with rollout to Schwab customers expected in the coming months. Schwab and Cboe are exploring related contracts using Cboe’s Plus Zone feature and may expand to other financial benchmarks, while avoiding markets tied to politics, sports or other nonfinancial events.