Cboe launches Cboe Predicts with Mini-S&P 500 binary options through Interactive Brokers

Cboe Global Markets Inc. has launched the first products under its new prediction markets suite, Cboe Predicts, introducing binary option contracts tied to the Mini-S&P 500 Index (XSP).

The contracts are now available through Interactive Brokers, with availability on Charles Schwab expected in the coming months. Additional retail brokerage platforms are also expected to provide access over time.

The launch extends Cboe’s existing S&P 500 Index options lineup and comes as interest in outcome-based trading products continues to grow. The XSP index tracks the performance of the S&P 500 Index but is scaled to one-tenth the size of the standard SPX contract, offering a lower-cost entry point for retail traders.

Under the new contracts, participants can take a “yes” position if they believe the index will settle at or above a specified level, resulting in a $100 payout if correct, or a “no” position if they expect the index to close below that level, also paying $100 if the outcome occurs. Incorrect predictions settle at $0.

“Following the success of SPX 0DTE options, we have seen continued customer demand for shorter-dated, outcome-based trading, creating a natural extension for Cboe to introduce XSP binary options,” said JJ Kinahan, Head of Retail Expansion and Alternative Investment Products at Cboe.

“Cboe’s S&P 500 options suite has long provided traders with flexibility to define their outcomes through traditional options strategies. With Cboe Predicts, we are expanding that choice by offering simple ‘yes-or-no’ payout event contracts, supported by dedicated educational resources designed to help customers participate more confidently and responsibly.”

The introduction follows a period of growth in prediction market activity across financial services. Companies including Robinhood, Interactive Brokers, and Coinbase have entered the sector alongside established operators such as Polymarket and Kalshi. 

However, the market continues to face regulatory questions, including jurisdictional disputes involving the Commodity Futures Trading Commission and state regulators.

Regulatory framework and future developments

Cboe said its XSP prediction market contracts are structured as security options and will trade under the same regulatory framework that governs US-listed options.

The products are centrally cleared through the Options Clearing Corporation (OCC), which oversees clearing and settlement activities.

“OCC stands ready to bring the same clearing infrastructure and risk management discipline that underpins all of the products we clear to the new binary options,” said Mike Hansen, Chief Clearing and Settlement Services Officer at OCC. “Our commitment to operational excellence and financial integrity ensures that participants can engage with confidence, knowing every transaction is supported by sound, well-established clearing and settlement services.”

Interactive Brokers CEO Milan Galik said investor demand for event-driven market exposure continues to increase.

“Investors increasingly seek products that allow them to express a specific view on future events and market outcomes,” Galik said. “Cboe’s binary options and Mini-S&P 500 Index contracts provide another way to do that, and we are pleased to make them available to Interactive Brokers clients.”

Charles Schwab also confirmed plans to add the contracts to its platform.

“We support approaches that bring transparency, defined risk, and investor education to financial-related prediction markets,” said James Kostulias, Head of Trading Services at Charles Schwab. “We plan to offer clients access to these binary options contracts in the coming months, building on our existing platform and demand from active traders.”

Cboe said a future release will allow trading of XSP vertical spreads through its patent-pending Quoted Spread BookSM (QSBSM) framework. The system is intended to package established options strategies into a format designed to help newer traders transition from binary event contracts to defined-risk options strategies.

The exchange has also introduced educational materials through a dedicated prediction markets resource hub and courses from The Options Institute.

“For more than 50 years, Cboe has built and operated some of the world’s most established and trusted markets,” said Rob Hocking, Global Head of Derivatives at Cboe.

“We look forward to bringing our experience, trusted market infrastructure, and the deep liquidity of the SPX options ecosystem to prediction markets. Our goal is to help set a higher standard for market integrity, product design, and investor protection by offering access through a regulated securities exchange and central clearing through OCC.”