Charles Schwab challenges Kalshi with new S&P 500 prediction market

Charles Schwab has entered the prediction markets business through a partnership with Cboe Global Markets, introducing new contracts tied to the performance of the S&P 500.

According to a Wall Street Journal report, the brokerage firm is working with Cboe to launch all-or-nothing options contracts that allow investors to take positions on where the benchmark U.S. stock index will finish. The product places Schwab alongside firms such as CME Group and Interactive Brokers, which have already expanded into prediction-style trading products.

People familiar with the matter told the Journal that the contracts are expected to become available to Schwab customers in the coming months. Unlike platforms such as Kalshi and Polymarket, which primarily offer futures-based event contracts, Schwab’s product will be structured as options.

The launch comes as competition intensifies among firms seeking to capitalize on growing demand for event-driven trading products. Recent activity has pushed prediction markets beyond political and sports outcomes into financial markets, where traders increasingly use contracts tied to economic and market events.

Schwab is focusing on stock market outcomes

Details reported by the Wall Street Journal indicate that Schwab’s initial offering will concentrate on measurable financial outcomes rather than the wider range of events available on platforms such as Kalshi and Polymarket. Discussions between Schwab and Cboe have also included the possibility of introducing contracts linked to other market indexes.

In addition to the all-or-nothing contracts, the Journal reported that Schwab plans to introduce an options product designed to provide partial payouts when traders come close to predicting an index’s closing level. The feature would use a Cboe mechanism known as the “plus zone,” allowing participants to receive some compensation even when their forecast is not exact.

Institutional interest in prediction markets has accelerated in recent months. Kalshi recently disclosed that institutional trading volume increased 800% over a six-month period as the company expanded its Wall Street presence and product lineup.

Meanwhile, data from DefiLlama shows Polymarket generated approximately $1.5 million in fees over the previous 24 hours and around $10 million during the last seven days, highlighting continued activity across crypto-native prediction platforms.

Crypto expansion continues alongside new market products

Schwab’s move into prediction-style contracts arrives as the firm continues building out its digital asset business.

As reported by crypto.news earlier in June, Schwab revealed plans to extend direct crypto services from retail investors to registered financial advisors. The company is targeting 2027 for spot cryptocurrency trading, transfers, and custody capabilities on its advisor platform, bringing crypto-related account management and asset servicing into its wealth management operations.

The advisor initiative follows the rollout of Schwab Crypto, the company’s spot Bitcoin and Ethereum trading service for retail customers. Schwab previously confirmed a phased launch of direct access to Bitcoin and Ethereum, with select U.S. clients already gaining access this year.

Taken together, the firm’s expansion into prediction-style contracts and cryptocurrency services adds new trading and investment products as established brokerages compete for a larger share of retail and advisor activity.