Cboe Launches Prediction Markets Product with Binary Options on S&P 500

Cboe Global Markets has launched 'Cboe Predicts,' a suite of binary option contracts on the Mini-S&P 500 Index, re-entering a market it abandoned in 2017. The regulated product, cleared by the OCC, competes with platforms like Polymarket and Kalshi and will be offered via Interactive Brokers and Charles Schwab. The move reflects growing demand for outcome-based trading, with Meta and Nasdaq also planning similar offerings.

Cboe binary options relaunch

• ▪The products are binary option contracts on the Mini-S&P 500 Index (XSP), which is 1/10th the size of the full S&P 500 Index (SPX)
• ▪A correct position pays a fixed amount of $100, while an incorrect one pays $0
• ▪Cboe Global Markets launched a new product suite called "Cboe Predicts" on June 24, 2026, entering the prediction markets space
• ▪The contracts, listed as XSPBW and XSPBX, allow traders to make a "yes-or-no" bet on whether the XSP index will close at or above a specified level
• ▪Cboe previously listed binary options on the S&P 500 in 2008, but the products were discontinued after failing to attract interest, with the last contract expiring in 2017
• ▪The launch was partly motivated by the success of Cboe's same-day expiring S&P 500 options (0DTE), which indicated demand for outcome-based trades

Prediction market competition

• ▪Nasdaq has received clearance to list its own binary index options later in 2026
• ▪Cboe's new product competes with established prediction market platforms like the crypto-native Polymarket and the regulated Kalshi
• ▪Other major financial firms are also entering the prediction market space, including Meta and Nasdaq
• ▪S&P 500 prediction markets on Polymarket and Kalshi have shown significant user interest, with volumes ranging from hundreds of thousands to over $4 million

Vertical spread payout feature

• ▪Cboe plans to introduce a feature built on a vertical spread, allowing for partial payouts instead of the traditional all-or-nothing outcome of binary options
• ▪This feature will be delivered through a proprietary, patent-pending system called the Quoted Spread Book

Broker distribution partnerships

• ▪The contracts are expected to become available on the Charles Schwab platform in the coming months
• ▪The Cboe Predicts contracts are initially available to trade through Interactive Brokers

Regulated versus crypto platforms

• ▪This regulatory structure contrasts with platforms like Polymarket and Kalshi, which have faced scrutiny from state regulators over concerns they constitute unlicensed gambling
• ▪Cboe's binary contracts are regulated securities-based options that clear through the Options Clearing Corporation (OCC)
• ▪Polymarket operates on a public blockchain, with bets placed and settled in the USDC stablecoin, and does not require user sign-ups