Schwab and Cboe Launch S&P 500 All-or-Nothing Options with Partial Payouts

Charles Schwab is moving into prediction-style markets, teaming up with Cboe Global Markets to roll out new contracts tied to the S&P 500 — a direct challenge to niche platforms like Kalshi and Polymarket as well as incumbent exchanges such as CME Group and Interactive Brokers. What’s launching - Schwab and Cboe are developing “all-or-nothing” options that let investors wager on where the S&P 500 will close. These contracts are structured as options rather than the futures-based event contracts common on Kalshi and Polymarket. - The products are expected to be available to Schwab customers in the coming months. - Initial offerings will focus on measurable financial outcomes (index closing levels) rather than the broader array of political or cultural events that many prediction markets cover. - Schwab and Cboe have also discussed expanding the lineup to include contracts tied to other market indexes. A twist: partial payouts - In addition to binary payouts, Schwab plans to offer an options product with partial payouts for near-misses using Cboe’s “plus zone” mechanism — so traders who come close to predicting an index level can still receive some compensation. Why this matters - Prediction markets have been broadening from politics and sports into financial markets, and institutional interest is accelerating. Kalshi recently reported an 800% jump in institutional trading volume over six months as it grows its Wall Street footprint. - Crypto-native platforms remain active: DefiLlama data cited Polymarket generating roughly $1.5 million in fees over the prior 24 hours and about $10 million over the last seven days, underlining ongoing demand for decentralized event trading. How this fits Schwab’s strategy - The move complements Schwab’s broader push into digital assets. The firm has already launched Schwab Crypto for retail spot Bitcoin and Ethereum trading in a phased rollout for select U.S. clients. - Schwab also plans to extend direct crypto services to registered financial advisors, targeting 2027 for spot crypto trading, transfers and custody on its advisor platform — integrating crypto servicing into its wealth-management offerings. Bottom line Schwab’s entry — via an options-based, index-focused prediction product and partial-payout mechanics — signals intensifying competition for event-driven trading. By leveraging its brokerage reach and pairing prediction-style contracts with an expanding crypto service roadmap, Schwab is positioning itself to capture both retail and institutional flows that have so far been split between traditional exchanges and crypto-native markets.