Charles Schwab Targets Kalshi and Polymarket Territory With New Cboe Deal

The brokerage Charles Schwab has reportedly partnered with Cboe Global Markets to offer binary-style options contracts tied to the S&P 500, according to a Wall Street Journal (WSJ) report citing “people familiar with the matter.” The contracts let customers wager on whether the index will close above or below a set strike price. A correct call pays a fixed amount. A wrong one expires worthless.

This is Schwab’s first concrete step into prediction-market territory. It follows months of public hesitation from CEO Rick Wurster.

A Shift From Earlier Caution

In December 2025, Wurster told the WSJ that Schwab planned to stay away from prediction markets and complex leveraged products. He pointed to the blurry line between investing and gambling, and the message it sends to younger investors chasing quick outcomes.

By April, his tone had changed. On Schwab’s first-quarter earnings call, Wurster said the firm was “taking a hard look” at prediction markets, but only ones tied to financial events like inflation data or index performance. He drew a clear line against sports, politics, and pop culture markets.

Now that look has turned into action.

How the Contracts Work

Schwab and Cboe Global Markets are said to be building the product on existing, regulated options infrastructure rather than a standalone prediction platform. Cboe has already moved to list Mini S&P 500 Index Binary Options, cash-settled contracts that pay either $100 or $0 depending on where the index lands relative to the strike price.

The two firms are also reportedly exploring Cboe’s “Plus Zone” feature, which offers partial payouts for near-miss outcomes instead of an all-or-nothing result.

Schwab plans to keep the offering narrow, the WSJ report notes. Contracts will track only objectively verifiable financial benchmarks, starting with the S&P 500. The firm has ruled out sports, elections, and other non-financial outcomes, a distinction Wurster has repeated since December.

The contracts are expected to reach customers within the coming months.

Why It Matters

Schwab manages roughly $11.8 trillion in client assets across 47.2 million accounts, based on first-quarter 2026 figures. Any product rollout at that scale reaches a customer base that most platforms in this space don’t have.

Prediction markets have grown fast since the 2024 election cycle, expanding into sports, economics, and policy outcomes. Kalshi and Polymarket have posted record volumes this year, and the 2026 FIFA World Cup has pushed sports-related betting on those platforms well past $3 billion in combined volume.

Other brokerages are watching the same trend. Robinhood has expanded its event contracts business, and Interactive Brokers has bundled access to Kalshi. Schwab’s entry adds a major name to that list, though its scope stays deliberately limited.

By routing the product through Cboe’s regulated options framework instead of building a new platform, Schwab avoids much of the regulatory uncertainty tied to standalone prediction markets. It also keeps the product inside the brokerage account structure that customers already use.