On June 23, 2026, Cboe Global Markets launched "Cboe Predicts," a suite of binary option contracts on the Mini-S&P 500. With this move, the operator brings the Cboe prediction markets format into the regulated US options market for the first time.
Prediction markets are tradable contracts in which participants bet on the outcome of a specific event, with a binary payout: all or nothing. Cboe now applies this principle to a stock index rather than to political or sporting events. Today the company ranks as the largest operator by trading volume, and it was originally founded in 1973 as the world's first listed options exchange. Moreover, "Cboe Predicts" extends the existing SPX and XSP options suite, particularly the popular 0DTE products. At launch, two tickers initially trade, XSPBW and XSPBX, on the Mini-S&P 500, which represents one-tenth of the full SPX. Finally, central clearing is handled by the Options Clearing Corporation (OCC).
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Binary payout in mini format: how Cboe prediction markets work
The contracts are based on the XSP, a version of the S&P 500 index scaled down to one-tenth and designed specifically for retail investors. The payout logic is straightforward. Whoever holds the correct "yes" or "no" position receives USD 100 per contract, otherwise the stake expires at USD 0. However, the two tickers represent two product variants. One reflects the strictly binary payout, while the other allows partial payouts within defined price bands. As a result, a market expectation about the index level can be translated into a clearly bounded outcome.
The retail focus is no coincidence and ties directly into an existing trend. Cboe's 0DTE options, which expire on the same trading day, have grown strongly in recent years. At times they account for more than half of daily SPX options volume. Therefore "Cboe Predicts" simplifies this dynamic for new market participants who are less familiar with classic options strategies. In addition, The Options Institute at Cboe offers educational resources and courses on the new products. Furthermore, the roadmap envisions future XSP vertical spreads via the proprietary "Quoted Spread Book" framework.
"Cboe's S&P 500 options suite has long given traders the flexibility to shape their outcomes through classic options strategies. With Cboe Predicts, we expand this choice by offering simple yes-or-no payout contracts." - JJ Kinahan, Head of Retail Expansion and Alternative Investment Products, Cboe Global Markets
SEC instead of CFTC: Cboe's regulatory sidestep
The decisive difference from the competition lies in the legal classification. "Cboe Predicts" contracts are security options and therefore trade within the same regulatory framework as US-listed options, thus under SEC oversight. As a result, they differ fundamentally from the event contracts at Kalshi and Polymarket, which instead operate under CFTC oversight as a futures exchange. For Cboe, this approach is not an exception but familiar standard infrastructure, because clearing through the OCC remains anchored in the established options market.
Meanwhile, the regulatory environment for prediction markets remains unclear. The CFTC first withdrew an older rule proposal in February 2026 and followed in March with a staff advisory as well as an advance notice of proposed rulemaking. The agency then published a formal rule proposal in June 2026, which is now open for 45 days of public comment. At the same time, a jurisdictional dispute between the federal government and individual states is escalating. In April 2026, Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com over allegedly unlicensed gambling operations, after which the CFTC in turn took action against Wisconsin and New York to enforce its federal authority. Furthermore, Minnesota became the first state to pass a ban on prediction markets. In addition, the CFTC filed a first enforcement action over insider trading in the event contract segment.
Cboe deliberately avoids exactly this tangle. By structuring its contracts as security options, the operator bypasses the unresolved jurisdictional dispute between the CFTC and individual states entirely. For market participants, this therefore means no new regulatory uncertainty, but rather a familiar framework with established safeguards and central clearing.
Schwab as a distribution channel: 35 million accounts as a benchmark
At launch, the contracts trade exclusively through Interactive Brokers. However, Charles Schwab is set to follow in the coming months, a broker with more than 35 million active accounts and client assets in the trillions. Additionally, further retail brokerage platforms are planned, which means the product's reach depends substantially on the breadth of these distribution partnerships.
Schwab's entry is more than a pure distribution deal. CEO Rick Wurster had until recently voiced open skepticism toward prediction markets. Therefore the partnership with Cboe can be read as a signal of the format's mainstream arrival. Moreover, the chosen path contrasts with the existing model, because Robinhood, Interactive Brokers, and Coinbase have so far routed prediction market orders to Kalshi. Analysts point out, however, that these markets currently support the trading revenues of Robinhood and Coinbase in a weak crypto environment.
Cboe is entering a market with 31 billion dollars in monthly volume
The timing of the market entry follows from a steep growth curve. The combined monthly trading volume of Polymarket and Kalshi rose from under USD 5 billion in September 2025 to around USD 24 billion in April 2026. According to Binance Research, the previous high came in May 2026 at USD 31.2 billion, of which 58 percent fell to Kalshi and 28 percent to Polymarket. Earlier, the industry had already recorded a monthly record of USD 25.7 billion in March 2026, with a total volume of more than USD 63 billion for 2025. Cumulatively, both platforms now reach a lifetime volume of USD 150 billion. For context, the monthly volume of legal US sports betting stood at around USD 14 billion in 2025 by comparison.
Kalshi has established itself as the dominant player in this segment and holds a market share of 52.6 percent in the US business. The platform recently reached a valuation of USD 22 billion after a USD 1 billion financing round led by Coatue Management, and it reaches an annualized trading volume of USD 178 billion, which more than tripled in six months. Institutional trading volume likewise grew by 800 percent over the same period. Polymarket, by contrast, forms the global counterpart with a 30-day volume of USD 9.7 billion, while the separate, CFTC-regulated US platform reached only USD 1.3 billion in April 2026.
The crypto connection remains structurally anchored, because Polymarket runs on the Polygon blockchain with settlement in USDC and hosts more than 5,400 active crypto markets. Moreover, economists have viewed prediction markets since Hayek as an efficient instrument of information aggregation that bundles dispersed knowledge into a single price signal. The fact that Cboe, a TradFi heavyweight, now adopts a format shaped by crypto-native platforms ultimately follows a familiar pattern of institutionalization. Competition is not the focus here, but rather the transfer of a new product category into regulated infrastructure.
