Charles Schwab is entering the prediction market sector through a strategic partnership with Cboe Global Markets. The brokerage will soon offer yes-or-no options contracts tied directly to S&P 500 performance, signaling a major shift in retail trading products.
Unlike futures-style contracts found on platforms like Polymarket, these instruments function as binary options. Traders receive a fixed cash payout if the index closes above or below a preset level; otherwise, the contract expires worthless. Rollout to Schwab clients is expected within months.
The firms are also exploring a Plus Zone feature allowing partial payouts for near-miss predictions. Future expansion may include other financial benchmarks, though Schwab intends to restrict offerings to verifiable financial data, explicitly excluding political and sports events.
This move places Schwab in direct competition with crypto-native firms and fintech rivals. Coinbase and Robinhood have recently introduced similar prediction offerings, highlighting growing institutional interest in event-based derivatives among affluent traders.