Charles Schwab is working with Cboe World Markets to launch a brand new sort of choices contract that may enable clients to make yes-or-no wagers on the efficiency of the S&P 500, marking the brokerage’s first transfer into prediction markets, in line with a Wall Avenue Journal report.
The function is anticipated to roll out to Schwab clients within the coming months, the Journal reported, citing folks acquainted with the matter.
Not like conventional prediction market platforms reminiscent of Polymarket and Kalshi, which usually supply futures-style contracts tied to the end result of occasions, Schwab’s product would perform extra like a binary possibility, through which the contract would pay a set money quantity or expire nugatory relying on whether or not the S&P 500 closes above or beneath a specified goal worth.
Schwab and Cboe are additionally in talks to supply an identical product tied to a Cboe function often known as the “Plus Zone,” which might enable merchants to obtain a partial payout when their prediction is near the ultimate end result, even when the index doesn’t end precisely on the goal stage.