Published on: June 19, 2026, 02:51h.
Updated on: June 19, 2026, 02:51h.
- Charles Schwab is set to enter the prediction markets sector with yes/no derivatives linked to the S&P 500 Index
- The brokerage is collaborating with Cboe Global Markets
- Sports-related contracts will not be included
Charles Schwab (NYSE: SCHW), a leading brokerage firm in the US, is reportedly moving into the prediction markets arena in the coming months, though its approach contrasts sharply with platforms like Kalshi and Polymarket.
In collaboration with Cboe Global Markets (BATS: CBOE), Schwab is gearing up to provide traders access to binary options — simplified yes/no contracts — concerning the S&P 500 Index, with a launch anticipated in the coming months according to The Wall Street Journal.
As noted by The Journal, Schwab is also introducing a similar options product featuring Cboe’s ‘plus zone,’ which allows traders to receive a partial payout if their forecasts are mostly accurate, even if the index’s closing price doesn’t match their prediction exactly.
While binary options and event contracts are different terms, their functionalities are quite comparable. Like event contracts in a prediction market, binary options yield a straightforward outcome where traders are either profitable at settlement or they are not; there’s no room for ambiguity.
Schwab’s Unique Approach to Prediction Markets
Platforms such as Kalshi and Polymarket provide a broad range of offerings beyond sports event contracts, including derivatives tied to financial markets. Their products encompass contracts on cryptocurrency, merger and acquisition activity, and other crucial equity indices.
Although sports event contracts are significant in this sector, Schwab is not expected to venture into that territory. The firm has openly criticized prediction markets for potentially misleading inexperienced investors into confusing gambling with investing.
CEO Rick Wurster asserts the distinct differences between genuine long-term investments and trading in prediction markets, which typically involve short-term strategies. However, during an earnings call earlier this year, he acknowledged that there’s a demand for prediction market products among clients, prompting Schwab to explore options for integrating these derivatives into their investment services.
Although Charles Schwab, the company’s founder, has invested in Kalshi, it seems unlikely that the brokerage will adopt a model similar to Kalshi’s for its prediction markets.
Cboe’s Hesitance Towards Sports Betting
Cboe is a logical partner for Schwab in the prediction market realm for various reasons, particularly their shared views on sports event contracts. Last November, the exchange operator indicated an intention to offer yes/no event contracts based on economic indicators and financial markets, while notably excluding sports derivatives from the plan.
Some trading platforms have adopted alternative strategies. For instance, Intercontinental Exchange (NYSE: ICE), the owner of the New York Stock Exchange (NYSE), is the primary investor in Polymarket, which, while not as sports-focused as Kalshi, still derives a significant portion of its activities from sports derivatives.
Similarly, CME Group (NASDAQ: CME) collaborates with FanDuel Predicts and facilitates trades for DraftKings Predictions, representing the prediction markets of the two leading US sportsbook operators.