Cboe Launches Into Prediction Markets Sector With Regulated Options Product - Unchained

Cboe Global Markets entered the prediction markets space Tuesday with the launch of Cboe Predicts, a new product suite that uses binary option contracts on the Mini-S&P 500 Index (XSP) to let retail traders take yes-or-no positions on where the index will close, all within the same regulated framework as standard U.S.-listed options.

The first two contracts, listed as XSPBW and XSPBX, are now live on Interactive Brokers. Charles Schwab will also offer access in coming months, with additional retail brokerage platforms to follow, Cboe said.

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Traders take a “yes” position if they believe XSP will close at or above a specified level, paying $100 if correct and $0 if not. A “no” position pays in reverse. XSP is scaled to 1/10th the size of the full S&P 500 Index (SPX), making it more accessible to retail participants. All contracts clear through the Options Clearing Corporation.

The OCC clearing is one of the primary differentiators between Cboe Predicts and platforms such as Polymarket and Kalshi, which have spent much of 2026 fighting state-level regulators who argue their event contracts are unlicensed gambling. Cboe’s binary contracts are securities-based options subject to standard U.S. exchange rules.

JJ Kinahan, Head of Retail Expansion and Alternative Investment Products at Cboe, described the launch as a natural extension of demand that followed the success of SPX 0DTE options, noting customer appetite for shorter-dated, outcome-based trading. Cboe also launched educational resources through The Options Institute alongside the products, designed to walk retail traders from basic yes/no contract mechanics through to more advanced options strategies.

A second phase is planned. Cboe intends to introduce XSP vertical spreads through a proprietary, patent-pending system it calls the Quoted Spread Book, designed to package common options strategies into a simpler format for traders already comfortable with binary contracts. The launch comes on the same day the New York Times reported Meta is building a prediction market application.

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