Charles Schwab is preparing to offer options contracts that let customers place yes-or-no wagers on where the S&P 500 will close, its first step into the prediction-market arena, the Wall Street Journal reported Friday, citing people familiar with the matter.
The brokerage is building the product with Cboe Global Markets and plans to make it available in the coming months, per the report. The contracts are binary options: they pay a fixed cash settlement if the index closes above or below a set level, and nothing if the prediction is wrong.
Reuters separately confirmed the partnership, citing a person familiar who declined to elaborate.
Schwab also plans to roll out a version that uses a Cboe feature called the "plus zone," which hands traders a partial payout when they are close, but not exactly on target, the Journal reported.
The structure sets Schwab's offering apart from Kalshi and Polymarket, which list event contracts rather than options. The payoff works much the same way, with a defined win or a total loss riding on a single outcome. Schwab and Cboe have discussed extending the lineup to other indexes and benchmarks, according to the report, but the brokerage apparently intends to limit the contracts to events with financial outcomes. That currently rules out bets on the World Cup or next year's Oscars.
