Cboe is re-entering the prediction-style trading business with new binary options tied to the S&P 500, stepping back into a market it exited more than a decade ago. The move places the U.S. derivatives exchange in direct competition with Kalshi and crypto-native Polymarket, both of which have built active markets around event outcomes.
A binary option is a yes-or-no contract that pays a fixed amount if a specific outcome occurs. In Cboe’s case, the contract asks whether the benchmark U.S. stock index will cross a certain level. That structure is close to what traders already see on Polymarket and Kalshi, though those platforms also list markets on politics, sports, and other public events.
Why Cboe is returning now
The launch comes after strong demand for short-duration, outcome-based trading in listed markets. Cboe said its same-day S&P 500 options, contracts that expire within hours, now account for about 30% of U.S. options volume. That surge has drawn attention to how much appetite there is for products built around a defined event or price result.
Interactive Brokers CEO Milan Galik said in a statement that investors increasingly want products that let them express a specific view on future events and market outcomes. Interactive Brokers is carrying the new binary contracts, and Cboe said Charles Schwab will also make them available later this year.
A second attempt after the first one failed
This is not Cboe’s first try. The exchange originally listed binary options on the S&P 500 and the Cboe Volatility Index in 2008, but the contracts failed to gain traction and were eventually withdrawn. The last of those contracts expired in 2017.
What changed is the rise of prediction markets that showed there is meaningful money in direct outcome trading. According to the report, a Polymarket position asking where the S&P 500 will land by the end of June has generated more than $528,000 in volume, while another market tied to where SPY will trade in June 2026 shows $518,000. On Kalshi, a month-end S&P market has $863,000 in volume, and a year-end contract has more than $4 million riding on the result.
Cboe adds a “plus” structure to soften the all-or-nothing payoff
Cboe said its new product includes a variation it calls “plus”, built on a vertical spread structure. Instead of a strict win-or-lose payout, the contract can pay proportionally as the index moves, allowing traders to capture partial gains.
The exchange says that gives users a more precise way to define risk than a simple yes/no contract. Behind the product, the broker is effectively placing two linked options trades: buying a call at a lower strike and financing it by selling a call at a higher strike.
Regulated brokerage product versus onchain access
The contrast with crypto prediction markets is sharp. Cboe’s contracts are regulated instruments distributed through U.S. brokerages. Polymarket operates onchain, where bets are placed and settled in USDC, a dollar-pegged stablecoin, on a public blockchain. It is open globally and does not require sign-up.
That openness has helped make the model visible well beyond U.S. brokerage users. The report pointed to a single anonymous wallet that turned about $4 million into a $9 million profit on Cabo Verde’s World Cup draw with Spain last week, with the full trade visible onchain.
More competitors are entering. On Tuesday, Meta said it is building a prediction-market app, and Nasdaq said it has clearance to list its own binary index options later this year. Cboe’s return is less about reviving an old product than reclaiming a market that Polymarket and Kalshi helped make commercially viable.