Charles Schwab is working with exchange operator Cboe to bring prediction-style, yes-or-no contracts to its brokerage customers. The contracts will let clients bet on binary outcomes — including whether the S&P 500 will close above a certain level — directly from their Schwab accounts.
What the contracts look like
The products are structured as simple yes-or-no derivatives. A trader might buy a contract that pays out if the S&P 500 ends the day above 5,500, or nothing if it doesn't. Schwab and Cboe haven't released a full list of underlying events, but they've confirmed S&P 500 level outcomes are part of the initial offering.
This isn't a sweepstakes or a gambling app. The contracts will trade on Cboe's existing exchange infrastructure, subject to the same regulatory oversight as options and futures. Schwab customers will see them alongside stocks, ETFs and other securities in their brokerage interface.
Why Schwab is moving into prediction markets
Retail demand for event-driven trading has surged over the past two years. Platforms like Polymarket have drawn millions of users — and regulatory scrutiny — with political and sports contracts. Polymarket currently shows a 23.1% probability for an event involving California Governor Gavin Newsom, a sign of how granular these markets have become.
Schwab's move positions it to capture that interest within a regulated, mainstream brokerage environment rather than push users toward unregistered platforms. The partnership with Cboe gives the contracts a clearing house and exchange-level transparency, something the decentralized prediction market world still lacks.
The regulatory terrain
Prediction contracts have a complicated history with U.S. regulators. The Commodity Futures Trading Commission has blocked some event-based derivatives in the past, arguing they resemble gambling. Cboe already runs a regulated options exchange, so its new contracts will need to pass muster under existing rules rather than seek novel exemptions.
Schwab has not said whether it will seek additional CFTC guidance before launching. The firm declined to comment on a timeline for the rollout.
What's clear is that the line between investing and betting is blurring. Schwab's move could force other large brokerages to decide whether to offer similar products or cede the business to newer, less regulated competitors.
