Key insights
- Charles Schwab is partnering with Cboe to launch new all-or-nothing options contracts on the S&P 500. These contracts allow customers to bet on the index's performance, with potential for partial payouts. This move reflects a growing trend in prediction markets and event contracts, following similar offerings from platforms like Robinhood and Interactive Brokers. While this expands trading tools, its direct impact on broad market movements is currently neutral.
June 19 (Reuters) - Charles Schwab is working with Cboe Global Markets to introduce all-or-nothing options contracts that allow customers to place yes-or-no wagers on the performance of the S&P 500, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Schwab will make binary options, which pay a set cash settlement or nothing at all depending on performance of index, available to customers in the coming months, the report said.
Charles Schwab did not immediately respond to a request for comment. A person familiar with the matter confirmed that Cboe is working with Charles Schwab to offer the products but gave no further details.
Prediction markets surged in popularity during the 2024 U.S. presidential election and have evolved into an asset class that lets investors wager on a variety of events, from monetary policy to sports tournaments. Trading platforms such as Robinhood and Interactive Brokers have rolled out event contracts in recent months.
The Wall Street Journal said Schwab is also rolling out an options offering with a Cboe feature that allows traders to earn a partial payout if they are mostly right, even if the closing price of the index is not exactly what they predicted.
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