Schwab Plans S&P 500 Prediction Markets as Event Trading Moves Mainstream

Charles Schwab (NYSE: $SCHW ) is preparing to enter the prediction-markets race with a product built around the S&P 500, adding another large brokerage name to a category already pulling in crypto-native platforms, retail trading apps and exchange operators.

The company is working with Cboe Global Markets on yes-or-no contracts tied to the performance of the S&P 500, according to reports citing people familiar with the plan. The contracts would function more like binary options than the futures-style event contracts commonly associated with Kalshi or Polymarket, paying a fixed amount if the index finishes above or below a preset level and nothing if it does not.

The rollout is expected to reach Schwab customers in the coming months. Schwab and Cboe are also discussing a related structure using Cboe’s Plus Zone feature, which could allow partial payouts when a trade lands close to the outcome even if it does not hit the exact target.

For Schwab, the planned launch puts prediction markets inside a more traditional market wrapper. The firm is expected to keep the initial focus on financial benchmarks, rather than contracts tied to politics, sports or entertainment. CEO Rick Wurster had already signalled earlier this year that Schwab would “likely have prediction markets,” while drawing a line around the type of events the brokerage wanted to offer.

The timing also shows how quickly the category is moving from crypto-adjacent speculation into mainstream brokerage infrastructure. Coinbase (NASDAQ: $COIN ) and Robinhood (NASDAQ: $HOOD ) have both expanded into prediction markets, while Kalshi and Polymarket helped turn event contracts into one of the most-watched trading themes after the 2024 election cycle.

Schwab’s version may look more like an options product than a crypto market, but the direction is similar: traders are getting simpler ways to express views on outcomes, indexes and macro events.