Charles Schwab to enter prediction markets with Cboe help

Prediction markets are moving closer to the center of U.S. brokerage, and Charles Schwab could help pull them there. The firm is preparing to offer customers all-or-nothing options contracts tied to the S&P 500 through a partnership with Cboe Global Markets, a shift that would bring event-style wagering into ordinary brokerage accounts and sharpen the line between investing, hedging and regulated gambling.

The products would let Schwab clients make yes-or-no bets on whether the S&P 500 finishes above or below a set level. In market terms, the contracts function like binary options: they pay a fixed cash amount if the benchmark lands on the right side of the threshold, and nothing if it does not. That structure makes the business familiar to derivatives traders but far more accessible to retail customers who may see it less as an obscure financial instrument than as a fast-moving bet on a market outcome.

Cboe has been laying the groundwork for this expansion for months. On March 9, 2026, the exchange operator unveiled a prediction-markets framework designed to move beyond pure binary payouts and add a third zone that gives traders partial returns when they are directionally right, but not perfectly precise. Cboe said its first Mini-SPX prediction-market contract was expected to launch in the second quarter of 2026, listed on the Cboe Options Exchange and centrally cleared through the Options Clearing Corporation.

The timing matters because federal regulators are still deciding how much room these products should have. On June 11, 2026, the Commodity Futures Trading Commission published a Notice of Proposed Rulemaking on prediction markets and event contract derivatives, asking for further clarity on which contracts may be deemed contrary to the public interest and blocked from trading or clearing on CFTC-registered venues. The agency had already issued an advance notice of proposed rulemaking and accepted public comments through April 30, 2026, underscoring that the policy framework remains unsettled.

That uncertainty has not stopped demand from building. Polymarket and Kalshi continue to operate active markets on politics and other event outcomes, while prediction markets have broadened from a 2024 U.S. presidential election phenomenon into wagers on monetary policy, sports tournaments, technology and culture. If Schwab adds distribution power to that ecosystem, prediction markets could gain the one thing they still lack in many corners of finance: the legitimacy that comes from sitting inside a major brokerage platform.