Charles Schwab has partnered with Cboe Global Markets to offer binary-style options contracts tied to the S&P 500, according to a Wall Street Journal report citing people familiar with the matter. The product is expected to reach customers in the coming months. CEO Rick Wurster reversed his December 2025 stance against prediction markets after stating in April that Schwab was taking a hard look at financial-event-based contracts. The brokerage manages $11.8 trillion in client assets across 47.2 million accounts as of Q1 2026. Prediction markets have expanded rapidly since the 2024 election cycle, with platforms like Kalshi and Polymarket posting record volumes this year.
CEO Wurster Shifted Stance From December 2025 Caution to April Endorsement
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 tied to financial events like inflation data or index performance. He drew a clear line against sports, politics, and pop culture markets.
Schwab and Cboe Build Product on Regulated Options Infrastructure
Schwab and Cboe Global Markets are building the product on existing regulated options infrastructure rather than a standalone prediction platform, according to the WSJ report. Cboe has 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 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, tracking only objectively verifiable financial benchmarks starting with the S&P 500. The firm has ruled out sports, elections, and other non-financial outcomes.
Schwab's $11.8 Trillion Client Base Enters Prediction Market Space
Schwab manages $11.8 trillion in client assets across 47.2 million accounts, based on first-quarter 2026 figures. 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. 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.
FAQ
What did Charles Schwab announce with Cboe Global Markets?
Charles Schwab partnered with Cboe Global Markets to offer binary-style options contracts tied to the S&P 500, according to a Wall Street Journal report. 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, while a wrong one expires worthless. The product is expected to reach customers in the coming months.
Why did CEO Rick Wurster change his stance on prediction markets?
In December 2025, Wurster told the WSJ that Schwab planned to stay away from prediction markets, citing the blurry line between investing and gambling. By April, on Schwab's first-quarter earnings call, Wurster said the firm was taking a hard look at prediction markets tied to financial events like inflation data or index performance. He drew a clear line against sports, politics, and pop culture markets. The partnership with Cboe represents the firm's first concrete step into this space.
How does Schwab's client base compare to existing prediction market platforms?
Schwab manages $11.8 trillion in client assets across 47.2 million accounts as of Q1 2026. This scale reaches a customer base that most platforms in the prediction market space do not have. Kalshi and Polymarket have posted record volumes this year, with sports-related betting on those platforms exceeding $3 billion in combined volume during the 2026 FIFA World Cup.
