Charles Schwab is planning to launch an S&P 500 prediction market in partnership with Cboe Global Markets. The move signals the brokerage’s push into newer, more experimental trading products aimed at retail and institutional clients alike.
What is a prediction market?
Prediction markets let traders bet on the outcome of future events — in this case, the direction or level of the S&P 500 index. Unlike traditional futures or options, these contracts often have binary payoffs: yes or no. They've been used for decades in political and economic forecasting, but major brokerages have mostly stayed away. Schwab's entry could change that.
Why Schwab is making the move
Schwab has been looking for ways to keep clients engaged beyond plain-vanilla stock and ETF trading. The company already offers options, futures, and forex. Adding a prediction market tied to the S&P 500 gives traders another tool to hedge or speculate on broad market moves without buying index funds or futures contracts. It also puts Schwab in competition with newer platforms like Kalshi and Polymarket, which have drawn attention — and regulatory scrutiny — for event-based contracts.
Cboe’s role
Cboe Global Markets, best known for running the largest U.S. options exchange, will provide the trading infrastructure and market-making support. The exchange already lists volatility products and index options, so an S&P 500 prediction contract is a natural fit. Cboe has been experimenting with prediction-style products for years, including its own event contracts tied to economic data releases.
Neither Schwab nor Cboe has disclosed a launch date or the precise structure of the contracts. Regulatory approval from the Commodity Futures Trading Commission may be required, depending on how the product is classified. Schwab’s move comes as the CFTC weighs new rules for event contracts, a debate that could shape how prediction markets operate in the U.S.
For now, Schwab customers will have to wait. The company said it will share more details closer to launch. Cboe declined to comment beyond the announcement.
