On June 23, the Chicago Board Options Exchange (CBOE) announced the launch of its first products for its prediction markets suite, “Cboe Predicts”: binary options contracts based on the Mini S&P 500 Index (XSP), with contract codes XSPBW and XSPBX. These contracts are already live on Interactive Brokers; the plan is to roll them out within the next few months.
Cboe Predicts’ first products: XSPBW and XSPBX binary options, now live on Interactive Brokers
According to an official Cboe announcement, XSPBW and XSPBX are the first listed contracts from the Cboe Predicts suite, both based on the Mini S&P 500 Index (XSP). They are already starting trading on Interactive Brokers. The plan is to roll them out within the next few months (the head of trading services James Kostulias said in a statement: “We plan to offer these binary options contracts to clients in the coming months, based on the needs of our existing platform and active traders.”), and other retail brokerage platforms will follow suit. All contracts are centrally cleared via OCC.
OCC Chief Clearing and Settlement Services Officer Mike Hansen said: “OCC is ready to apply the same clearing infrastructure and risk management systems to new binary options trading.”
XSP binary options payout mechanism: pay $100 if eligible, otherwise pay $0
According to an official Cboe announcement, Cboe Predicts’ XSP binary options use the following payout structure:
“Yes” position: If the XSP index settlement value is equal to or above a specified level, pay $100; otherwise pay $0;
“No” position: If the XSP index settlement value is below a specified level, pay $100; otherwise pay $0.
Traders can express their view on the XSP closing price by establishing a “Yes” or “No” position. Cboe also launched a Predictive Markets Resource Center and courses from the Options Institute (with over 40 years of history), guiding traders to gradually master the concepts of options.
Plans to go live; the QSB framework allows vertical spread trading for later versions
According to a Cboe announcement, the plan is to roll out these binary options contracts within the coming months. This is a plan with a defined time frame, but the specific launch dates have not been announced.
In addition, Cboe plans in later versions to enable XSP vertical spread trading through its “Quoted Spread Book (QSB)” framework, which it is currently applying for a patent. The goal is to help traders who are already familiar with the “Yes/No” structure gradually move into more advanced options strategies. The QSB framework and vertical spread functionality are part of later version plans and have not been launched yet.
Frequently asked questions
How is Cboe Predicts different from prediction market platforms like Kalshi and Polymarket?
According to an official Cboe announcement, the XSP prediction market contracts in Cboe Predicts are regulated “security options,” traded within the same regulatory framework as U.S.-listed options, with centralized clearing through OCC. They provide institutional-grade liquidity, transparency, and market monitoring. Kalshi and Polymarket are non-traditional exchange platforms, with compliance and clearing mechanisms that differ from Cboe’s traditional exchange model.
How do the risks of XSP binary options differ from traditional options?
According to Cboe’s explanation, XSP binary options use a fixed payout structure: for each contract, the final payout is either $100 (success) or $0 (failure). The maximum loss and maximum gain are known at the time of purchase. Cboe emphasized that this design helps clearly define risk and is paired with dedicated educational resources to guide traders to participate responsibly.
Does the launch plan have a specific timeline?
According to statements by James Kostulias, head of trading services, in a Cboe press release, the plan “plans to” roll out these binary options contracts within the next few months, but does not provide specific launch dates. Interactive Brokers is already live, and other retail brokerage platforms will also gradually offer the service.
