Charles Schwab Enters the Prediction Markets Space

Charles Schwab is preparing to enter the rapidly growing prediction markets sector. According to The Wall Street Journal, the brokerage firm is working with Cboe Global Markets on a new type of S&P 500-linked options contract.

The new product is expected to become available to Schwab clients in the coming months. It will allow investors to speculate on whether the S&P 500 index will finish above or below a predetermined level.

Unlike platforms such as Polymarket and Kalshi, which offer contracts tied to a wide range of real-world events, Schwab’s solution will function more like a binary option. Investors will receive a fixed payout if their prediction proves correct; otherwise, the contract will expire worthless.

Schwab and Cboe are also considering a similar product based on Cboe’s “Plus Zone” feature. Under this model, investors could receive a partial payout even if their prediction is not entirely accurate, provided the final outcome remains close to their forecast.

Sources cited by The Wall Street Journal say the companies are also exploring the possibility of expanding the offering to additional stock market indices and financial benchmarks. However, Schwab intends to focus exclusively on financial events with clearly measurable and verifiable outcomes. The firm has no plans to offer contracts related to politics, sports, or other non-financial events.

If launched, the initiative would place Schwab among the growing number of companies entering the prediction markets industry. Platforms such as Kalshi and Polymarket have attracted increasing interest from investors looking to speculate on election outcomes, economic data releases, and other major events.

Cryptocurrency and retail trading companies have also begun expanding into this space. Most recently, Coinbase (COIN) and Robinhood (HOOD) introduced their own prediction market offerings.