NEW YORK, June 18 (World Daily Times) — Charles Schwab is reportedly working with Cboe Global Markets on a new type of contract tied to the S&P 500, a move that could bring prediction-market-style trading into the mainstream brokerage world and give retail investors another way to wager on market direction.
According to people familiar with the matter, as reported by The Wall Street Journal, the proposed products would be all-or-nothing options contracts. In plain terms, a customer would make a yes-or-no bet on whether the S&P 500 reaches a certain level or performs in a certain way. If the bet is right, the contract would pay out in cash. If it is wrong, it would pay nothing.
For Schwab, one of the country’s largest brokerage firms, the reported plan is notable because it would open a new line of products that sits close to the line between investing and speculation. For Cboe, the exchange operator, the move would deepen its role in derivatives trading and could help it compete in a fast-growing corner of the market.
The customer impact could be significant. If the products reach Schwab accounts, retail traders would have a new way to take positions on the broader stock market without buying shares or traditional index funds. But the structure also raises risk: these contracts are designed to be all-or-nothing, which means a trader can lose the full amount at stake.
The reporting also underscores a sharp change in tone from Schwab. In December, Schwab CEO Rick Wurster said in a Wall Street Journal live coverage item that the firm was not interested in prediction markets, saying, “I believe there is a clear distinction between gambling and investing. Merging these two concepts is not beneficial.” The Journal’s later report did not explain what changed.
The exact launch date is still unclear. Reuters-distributed coverage said the products could reach customers in the coming months, but the reporting did not include a company filing, regulator approval, or official statement confirming the plan. It also did not spell out fees, eligibility rules, or whether the contracts would appear on Schwab’s own platform or through another venue.
The broader market backdrop helps explain why the idea matters. Cboe has previously discussed bringing back all-or-nothing options for individual investors, a sign that major financial firms are testing whether prediction-style contracts can become a new business line. If that happens, the benefits would likely go to brokerages and exchanges first, while customers would need to decide whether the products fit their goals and risk tolerance.
For New York’s financial community, the development is another sign that Wall Street firms are looking for new ways to monetize trading activity as competition intensifies across brokerage, exchange-traded products and speculative market games.
