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Financial services leader Charles Schwab is preparing to enter the prediction markets sector through a strategic collaboration with Cboe Global Markets, according to a report from the Wall Street Journal.
The brokerage previously signaled this move during its first-quarter earnings call, where CEO Rick Wurster indicated that the company would likely introduce prediction markets. However, Wurster explicitly distinguished these professional financial offerings from platforms used for wagering on sports, politics, or entertainment.
Sources familiar with the matter state that Schwab will utilize Cboe Global Markets to offer contracts allowing users to speculate on the performance of the S&P 500, the primary index tracking the largest publicly traded U.S. companies.
These markets will function similarly to those operated by platforms such as Kalshi and Polymarket, providing users with binary choices on whether an asset’s price will close above or below a specific target.
As an example of this model, Myriad—a product of Dastan, the parent company of Decrypt—allows participants to wager on whether Bitcoin will exceed a specific price point, such as $62,000, at a designated time.
Additionally, Schwab is expected to implement a “Plus Zone” feature. This mechanism would provide payouts based on the proximity of the S&P 500’s close to the target number, offering a discounted payout to users who are nearly accurate in their predictions.
The prediction markets are slated for release in the coming months, with the possibility of expanding to other major financial benchmarks and indices in the future.
This move follows Schwab’s recent expansion into digital assets, including the launch of spot Bitcoin and Ethereum trading for a select group of retail users. That rollout began with an employee pilot and is expected to expand to more customers shortly.
Managing $11.8 trillion in total customer assets, Schwab is also exploring the stablecoin market, with Wurster stating last July that the firm intends to offer such products.
Shares of SCHW closed down nearly 3% on Thursday, trading around $91.70. U.S. markets remain closed Friday in observance of the Juneteenth holiday.
