As prediction markets keep growing and gaining more traction across the financial world, brokerage giant Charles Schwab is getting ready to launch its own version of the fast-growing trading product.
According to reports, Schwab is currently collaborating with Cboe Global Markets to introduce binary options linked to the S&P 500 Index.
The new offering, which could become available within the next few months, would enable traders to make simple “yes or no” types of predictions regarding market movements.
Big Step for American Brokerage Companies
The move represents a notable step for one of the largest brokerage firms in the United States, but Schwab’s approach appears to be rather different from platforms such as Kalshi and Polymarket, which have chosen to build their businesses around a wide range of event-based contracts.
According to the proposed structure, traders would be allowed to take positions on whether specific market outcomes will occur, with contracts paying out if the prediction proves correct, and the position expiring worthless if the opposite occurs.
The concept is similar to market contracts that have become increasingly popular among retail traders.
Schwab could also offer an additional product linked to a Cboe feature known as the “plus zone,” with partial payouts handed over to traders who come close to predicting the correct outcome, even if they are not entirely accurate.
Unlike many prediction market operators, Schwab is unlikely to expand into sports-related contracts, as the company has repeatedly expressed concerns that some investors may confuse prediction markets with traditional investing.
Executives have argued that wagering on short-term events differs significantly from building long-term investment portfolios.
Despite those reservations, Schwab has acknowledged growing client demand for prediction-style products.
Earlier this year, chief executive Rick Wurster suggested the company was exploring ways to provide customers with access to such instruments within their existing brokerage accounts.
The partnership also reflects Cboe’s cautious stance toward sports contracts. The exchange operator has previously outlined plans to offer event-based products tied to economic indicators and financial markets rather than sporting events.
For Schwab, the launch would mark a significant entry into one of the most closely watched segments of modern financial trading, while maintaining a focus on traditional market-related forecasts rather than sports betting.