Schwab's $12T Enters the Arena: S&P 500 Yes-or-No Bets Coming to Cboe 🎯

Charles Schwab, a brokerage firm overseeing up to $12 trillion in customer assets, is partnering with derivatives exchange Cboe Global Markets to launch a prediction market built around the S&P 500, according to a Wall Street Journal report citing people familiar with the matter. The product, expected to roll out to Schwab customers in the coming months, will take the form of all-or-nothing options contracts that let users make yes-or-no wagers on whether the S&P 500 closes above or below a preset target price. Schwab CEO Rick Wurster had signaled the move earlier this year on the firm's first quarter earnings call, saying it would "likely have prediction markets," while drawing a distinction between financial-market wagers and contracts tied to sports, politics, or entertainment.

The offering differs structurally from event-based platforms such as Polymarket and Kalshi, which typically list futures-style contracts. Schwab's contracts will be options-based and limited to financial benchmarks, and the firm plans to focus on events with objectively verifiable market outcomes. Schwab and Cboe are also exploring a similar product tied to a Cboe feature called the "Plus Zone," which would allow traders to earn a discounted partial payout when the S&P 500 finishes close to, but not exactly at, the target level. The companies have discussed expanding the lineup beyond the S&P 500 to other market indexes or financial benchmarks.

The launch positions Schwab among a growing roster of financial incumbents moving into prediction markets, following moves by the CME Group and Interactive Brokers, the latter of which rolled out a platform integrating Kalshi, CME, and ForecastEx. Crypto and retail trading firms have also expanded into the space, with Coinbase (COIN) and Robinhood (HOOD) recently introducing prediction market offerings, while industry projections cited in reporting estimate the market could reach $1 trillion in annual volume by 2030. Last month, Schwab expanded its digital asset footprint by launching spot trading for Bitcoin and Ether to a batch of retail users following a successful employee pilot, with a phased rollout expected over the coming months. The firm, which reported $11.8 trillion in total customer assets and Q1 2026 net income of $2.5 billion, has also expressed interest in stablecoins, with Wurster saying in July that offering them is "something we do want to be able to offer."

Schwab's move comes as prediction markets face heightened regulatory attention. Rep. Bryan Steil (R-Wis.), who chairs the House Administration Committee, introduced the Stop Lawmakers from Predicting Act, which would bar members of Congress, their spouses, and dependent children from placing wagers on prediction markets tied to legislation, government actions, or election results. The U.S. Commodity Futures Trading Commission under Chair Michael Selig has taken the position that event contracts on prediction markets qualify as "swaps" and that the agency holds exclusive jurisdiction, with cases involving Kalshi, Polymarket, the CFTC, and state authorities continuing to be litigated. Shares of SCHW finished down nearly 3% on Thursday, changing hands around $91.70, with U.S. markets closed Friday for the Juneteenth holiday.