Cboe Launches Prediction Market to Rival Kalshi and Polymarket

Cboe has entered the prediction markets industry with its new outcome-based trading products offering. The initial product includes binary option contracts on the Mini-S&P 500 Index (XSP). It positions the derivatives exchange as a direct rival to prediction markets platforms like Kalshi and Polymarket.

Cboe Launches First Products in New Prediction Markets Suite

Cboe Global Markets has launched its first products as binary options contracts in its new prediction markets suite Cboe Predicts, according to an official announcement.

This marks the derivatives exchange's re-entry into binary options. Notably, Cboe first launched binary options on the S&P 500 and VIX back in 2008 but pulled them after failing to attract investor interest.

The initial offering includes binary option contracts based on the Mini-S&P 500 Index (XSP), listed under the symbols XSPBW and XSPBX. Users have to choose 'yes' or 'no' on whether the S&P 500 will hit a certain level in the near term.

Cboe's contracts are available on Interactive Brokers and will roll out at Charles Schwab over the coming months, the company said. Additional retail brokerage platforms will offer access over time, it added.

"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 alternative investment products at Cboe.

Kalshi and Polymarket Face Rising Competition

As CoinGape reported earlier, broker Charles Schwab is entering prediction markets, launching all-or-nothing options contracts on the S&P 500's performance. The TradFi giant will become the latest to offer prediction markets, joining the likes of the CME and Interactive Brokers.

Meanwhile, Meta Platforms CEO Mark Zuckerberg has unveiled the prediction market app 'Arena' amid strong investor demand. Analysts see Cboe Predicts prediction market suite as Wall Street's response to retail appetite for simple, high-engagement trading formats that have options, betting, and information markets.

Notably, Kalshi and Polymarket recorded a combined monthly global trading volume of about $24 billion in April. It has increased from less than $5 billion in September last year, according to Pew Research Center data.