Charles Schwab is building binary options tied to the S&P 500 with Cboe, marking its first move into prediction-market-style products.
Crypto News
Charles Schwab (NYSE: SCHW) is preparing to launch binary options contracts tied to the S&P 500 index. The brokerage is building the product in partnership with Cboe Global Markets.
The Wall Street Journal first reported the plan on June 19, 2026, citing people familiar with the matter. Reuters later confirmed the partnership through a separate source.
The contracts will pay a fixed amount if the S&P 500 closes above or below a set level. They will pay nothing if the prediction is wrong. This structure mirrors the binary bets already offered by prediction market platforms such as Kalshi and Polymarket. It marks Schwab's first entry into prediction-market-style products.
Schwab's 'Plus Zone' Feature
Schwab also plans to add a feature called the "plus zone," developed with Cboe. The feature is built for traders who land close to the right price but do not hit it exactly. Those traders would receive a smaller, discounted payout instead of nothing. The products are expected to launch within the next few months.
Schwab and Cboe have discussed expanding the lineup to other indexes and financial benchmarks. The brokerage plans to limit contracts to events with financial outcomes only. This rules out wagers tied to sports or entertainment, such as the World Cup or the Oscars.
The move marks a shift in tone for Schwab CEO Rick Wurster. In December 2025, Wurster told the Journal that sports and entertainment wagers blur the line between investing and gambling. He said at the time that prediction markets were not high on the company's priority list. Earlier this year, on Schwab's first-quarter earnings call, Wurster said the firm would likely add prediction markets eventually.
Avoiding The Sports-Betting Legal Fight
Schwab's approach sidesteps the legal disputes now facing some of its rivals. Kalshi and Polymarket face state-level legal challenges, including one filed by Kentucky this week, alleging the platforms run unlicensed sportsbooks under the label of event contracts. The Commodity Futures Trading Commission (CFTC) has taken the opposite position, arguing that licensed prediction markets fall under its own federal authority, and the agency has sued multiple states over the dispute.
Schwab brings significant scale to the prediction-market space. The brokerage holds roughly $13 trillion in client assets and serves tens of millions of brokerage accounts. Schwab began offering spot Bitcoin (BTC) and Ethereum (ETH) trading to retail users last month, following a successful internal employee pilot.
Read More: Charles Schwab Launches Spot BTC and ETH Trading for Retail Clients
Other firms have already expanded into event contracts over the past year. Robinhood and Coinbase have both leaned on Kalshi to build out their offerings, while Robinhood has also started building its own CFTC-regulated exchange. Kalshi handled $16.81 billion in trading volume in May 2026, compared with $7.08 billion for Polymarket, and is reportedly in early talks with investment banks about a possible IPO after a funding round in May valued the company at $22 billion.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
