Cboe, a leading U.S. derivatives exchange, has announced its entry into the prediction-market sector by relaunching binary options on the S&P 500 index. This strategic pivot comes after the exchange abandoned similar products over a decade ago, placing Cboe in direct competition with emerging platforms like Kalshi and the crypto-based Polymarket.
Binary options function as “yes-or-no” wagers that provide a fixed payout if a specific condition is met—in this instance, whether the benchmark U.S. equity index reaches a designated price level. While Polymarket and Kalshi offer similar mechanics, their scope is broader, extending into political events, sports, and other global outcomes.
The move is bolstered by Cboe’s recent success with same-day S&P 500 options. These ultra-short-term contracts, which expire within hours, currently account for approximately 30% of all U.S. options volume, signaling a strong appetite among traders for rapid, outcome-based instruments.
“Investors increasingly seek products that allow them to express a specific view on future events and market outcomes,” stated Milan Galik, CEO of Interactive Brokers, which is currently supporting the binary contracts.
The new offerings are scheduled to become available via Charles Schwab later this year.
A Strategic Return
This is not Cboe’s first attempt at this market. The exchange originally listed binary options on the S&P 500 and the Cboe Volatility Index in 2008. However, those products failed to gain significant traction and were eventually phased out, with the final contracts expiring in 2017.
