Charles Schwab is partnering with Cboe Global Markets, the parent company of the Chicago Board Options Exchange, to launch predictive contracts linked to the S&P 500 performance in the coming months. Unlike event futures commonly offered by Kalshi and Polymarket, this product will use an options structure, demonstrating that traditional brokerages are accelerating their entry into the event-driven trading market.
The first batch of products focuses on the S&P 500.
According to a report by The Wall Street Journal, citing sources familiar with the matter, Charles Schwab is preparing to launch "all-or-nothing" option contracts, allowing clients to bet on where the S&P 500 index will ultimately fall. If the prediction is correct, the contract will be settled according to the pre-defined method; if the prediction is incorrect, the profit will be zero.
Reports indicate that Charles Schwab's initial products will focus on quantifiable financial outcomes, rather than covering broader political, sporting, or social events like Kalshi and Polymarket. The two companies have also discussed expanding the contracts to other market indices in the future.
Partial compensation may be awarded even if the prediction is close to the target.
In addition to fully settled products, Charles Schwab also plans to launch an options product with the feature of "paying out even if the prediction is close enough." This design will use Cboe's so-called "plus zone" mechanism, which means that even if investors do not accurately predict the closing price of the index, they can still receive partial compensation as long as the result is close enough.
This design differs from traditional binary outcome products, and it also means that Charles Schwab wants to package predictive trading into a product that is closer to a mature derivatives system, rather than simply replicating the model of a crypto-native prediction platform.
Encryption services expand in tandem
As demand for event-driven trading rises, more and more institutions are starting to invest in prediction markets. Charles Schwab's move puts it on the same playing field as established players like CME Group and Interactive Brokers. Kalshi previously disclosed that its institutional trading volume grew by 800% in six months.
Meanwhile, DefiLlama data shows that Polymarket's transaction fees over the past 24 hours were approximately $1.5 million, and over the past 7 days were approximately $10 million, reflecting that the activity of crypto-native prediction platforms remains strong.
Charles Schwab is also continuing to expand its digital asset business. Crypto.news previously reported that the company plans to extend its direct crypto services from retail clients to its registered investment advisor platform, aiming to offer spot cryptocurrency trading, transfer, and custody capabilities by 2027. Its retail platform, Schwab Crypto, already supports spot Bitcoin and Ethereum trading, and some US clients gained direct access this year.
