Charles Schwab is working with Cboe World Markets to launch a brand new kind of choices contract that will enable prospects to make yes-or-no wagers on the efficiency of the S&P 500, marking the brokerage’s first transfer into prediction markets, in response to a Wall Road Journal report.
The characteristic is anticipated to roll out to Schwab prospects within the coming months, the Journal reported, citing folks accustomed to the matter.
In contrast to conventional prediction market platforms equivalent to Polymarket and Kalshi, which generally provide futures-style contracts tied to the end result of occasions, Schwab’s product would operate extra like a binary choice, through which the contract would pay a set money quantity or expire nugatory relying on whether or not the S&P 500 closes above or beneath a specified goal worth.
Schwab and Cboe are additionally in talks to supply an identical product tied to a Cboe characteristic often called the “Plus Zone,” which might enable merchants to obtain a partial payout when their prediction is near the ultimate end result, even when the index doesn’t end precisely on the goal stage.
