Cboe Global Markets started trading binary options on June 23, offering traders a yes-or-no bet on a scaled-down version of the S&P 500. The contracts, linked to the Mini-S&P 500 Index — set at one-tenth the size of the benchmark — pay out exactly $100 if the prediction is correct and $0 if it's not. Broker Interactive Brokers is among the platforms letting customers place these bets.
How the binary contracts work
Each contract is a simple proposition: will the Mini-S&P 500 Index be above or below a certain level at expiration? Traders buy in at a price that reflects the market's probability. If they're right, they get $100. If wrong, they get nothing. The fixed payout structure removes the sliding scale of traditional options, where gains and losses depend on how far the index moves. Cboe designed the contracts to bring prediction-market mechanics into a regulated exchange environment.
Why Cboe is moving into this space
Prediction markets have drawn growing attention for their ability to distill real-time sentiment into a price. Cboe's binary options offer a similar concept but within the existing framework of a SEC-regulated exchange. The Mini-S&P 500 Index — already used for futures and options — gives traders exposure to the broad market at a fraction of the notional value. Cboe likely sees this as a way to attract retail traders who want a clear, high-stakes bet without the complexity of delta hedging.
For someone using Interactive Brokers, the binary option is straightforward. Pick a direction, decide how much to risk, and wait for settlement. The all-or-nothing payoff eliminates the gray areas of conventional options. But it also means a wrong call wipes out the entire premium. Traders familiar with prediction markets like Kalshi or Polymarket might find the interface familiar, though Cboe's version settles against the S&P 500, not a political or event-based question.
The first day of trading saw modest volumes, according to exchange data. Brokers have not yet commented on early demand.
