Cboe Global Markets (Cboe) today announced the launch of its first prediction market products under the new Cboe Predicts suite. The initial offerings are binary options contracts based on the Mini-S&P 500 Index (XSP), trading under the tickers XSPBW and XSPBX. These contracts are now available for trading through Interactive Brokers, with plans to expand to Charles Schwab in the coming months and additional retail brokerage platforms thereafter.
Product Details and Trading Mechanism
Cboe Predicts is the latest extension of Cboe's S&P 500 Index (SPX) product family. XSP allows clients to trade the performance of the S&P 500 Index but with a contract size one-tenth that of SPX, making it more accessible to retail investors. Traders can express a view on the closing level of XSP by selecting either a 'call' position — which pays $100 if the index settles at or above a specified level, and $0 otherwise — or a 'put' position — which pays $100 if the index settles below that level, and $0 otherwise.
Future Expansion Plans
In future versions, Cboe also plans to enable trading of XSP vertical spreads through its proprietary, patent-pending Quoted Spread Book SM (QSB SM) framework. This framework is designed to package widely used option strategies into a simpler, more intuitive format, helping novice traders who are already familiar with 'yes/no' outcomes gradually advance to more sophisticated option concepts while maintaining risk-controlled strategies.