Charles Schwab is collaborating with Cboe Global Markets on a new options contract that would let customers stake yes-or-no positions on how the S&P 500 performs, the brokerage’s first step into prediction markets, according to a Wall Street Journal report.

The feature is expected to reach Schwab customers within the next few months. In contrast to dedicated platforms like Polymarket and Kalshi, which generally run futures-style contracts on event outcomes, Schwab’s offering would behave like a binary option, paying out a fixed sum or nothing at all based on where the S&P 500 settles relative to a chosen strike.

This story is an excerpt from the Unchained Daily newsletter.

The companies are separately exploring a product linked to a Cboe mechanism called the “Plus Zone,” which would hand traders a partial payout when their call lands near the result without hitting it exactly. They have also floated widening the menu past the S&P 500 to additional indexes or benchmarks, though Schwab intends to limit itself to outcomes that can be objectively verified in financial markets, steering away from politics, sports, and other real-world events.

The move would add Schwab to a fast-growing field. Venues such as Kalshi and Polymarket have pulled in traders betting on everything from election results to economic releases, and crypto and retail-brokerage players have followed. Coinbase rolled out prediction markets via a Kalshi partnership in December, while Kalshi and Polymarket have both pushed toward crypto perpetual futures to grow beyond event contracts.

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