Schwab Enters Prediction Markets With Yes-Or-No S&P 500 Wagers

Charles Schwab plans to enter the prediction markets business with yes-or-no options contracts tied to the S&P 500, partnering with Cboe Global Markets.

Key Points:

Schwab Eyes S&P 500 Bets

News of the plan broke on Jun. 19, with people familiar pointing to a launch within months through Cboe. The contracts would pay a fixed cash amount if the S&P 500 closes above or below a target price, and nothing otherwise. The shift marks the brokerage's first step into prediction markets, a field already pulling in exchanges, fintech apps and crypto-native platforms.

That all-or-nothing setup separates the product from Kalshi and Polymarket, which run futures-style event contracts across a sprawl of outcomes. Schwab is also weighing a Plus Zone feature, paying a smaller multiple to traders who land close but miss the exact mark. The two firms have discussed extending the lineup to other indexes and benchmarks over time.

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Wurster Frames Schwab Approach

CEO Rick Wurster flagged the shift earlier this year, telling analysts the firm would likely add prediction markets because clients want derivatives and portfolios in one place. He drew a hard line against sports, politics and entertainment wagers. When we do, we will stay away from gambling, Wurster said.

Momentum favors the firm, which logged a record 9.9 million daily average trades in the first quarter, underscoring how heavily retail traders have leaned on the platform.

The move also deepens a wider digital build-out.

In May, the firm opened spot Bitcoin (BTC) and Ether (ETH) trading to a portion of retail clients, while its shares slipped nearly 3% on Thursday to near $91.70 before the Juneteenth break.

Rivals already crowd the field. Coinbase and Robinhood have tied prediction tools to their retail apps, while CME Group and Interactive Brokers field similar event-based products. Some forecasts put the sector near $1 trillion in annual volume by 2030.

Scrutiny still hangs over the space. The Commodity Futures Trading Commission, led by Chair Mike Selig, treats event contracts as swaps under its jurisdiction, while state regulators and members of Congress push for tighter rules. Several disputes tied to the leading platforms remain unresolved in the courts, leaving the rules in flux.

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