Cboe revives S&P 500 binary options, chasing a market popularized by Polymarket, Kalshi

Cboe, one of the largest U.S. derivatives exchanges, said it is entering the prediction-market arena and is reviving binary options on the S&P 500 index after abandoning them more than a decade ago, a move that brings it into competition with platforms such as Kalshi and the crypto-native Polymarket.

A binary option is a yes-or-no bet that pays a fixed amount if an outcome occurs, in this case whether the benchmark U.S. equity index crosses a specific level. That is close to what Polymarket and Kalshi already offer, though their offerings go beyond stock market forecasts to cover political and sporting outcomes as well as other topics.

The introduction follows Cboe's success with same-day S&P 500 options, contracts that expire within hours and now make up about 30% of U.S. options volume, calling attention to the demand for fast, outcome-based trades.

"Investors increasingly seek products that allow them to express a specific view on future events and market outcomes," said Milan Galik, CEO of Interactive Brokers, which is carrying the binary contracts, in a statement.

The contracts will also become available on Charles Schwab later this year.

Second time round

Cboe has tried this market before. It first listed binary options on the S&P 500 and the Cboe Volatility Index in 2008, but they failed to draw interest and were pulled, with the last such contract expiring in 2017.

What has changed in the intervening years is the rise of the prediction markets, with Polymarket and Kalshi proving there is real money in letting people bet directly on outcomes.

A Polymarket position for "What will S&P 500 (SPX) hit by end of June?" currently shows volume of more than $528,000, and another for "What will S&P 500 (SPY) hit in June 2026?" has $518,000. On Kalshi, "How high will the S&P get by month-end?" has $863,00 in volume while the year-end bet has more than $4 million hanging on the outcome.

Their success has attracted several other entrants. On Tuesday, Mark Zuckerberg's Meta (META) said it is building a prediction-market app, and the Nasdaq exchange said it has clearance to list its own binary index options later this year.

Cboe said it is adding a twist it calls "plus," built on a vertical spread, an options structure that pays out proportionally as the index moves rather than all-or-nothing.

That lets a trader collect partial winnings instead of the binary's win-everything-or-nothing outcome, which Cboe pitches as a way to define risk more precisely than a simple yes/no contract.

Behind the scenes, the broker is actually placing two linked options, a bought call at a lower level funded by a sold call at a higher one.

The new entrants are tamer than the incumbents by design. While Cboe's product is a regulated instrument sold through U.S. brokerages, Polymarket runs onchain with bets placed and settled in USDC, a dollar-pegged stablecoin, on a public blockchain. It is open worldwide with no sign-up required.

Such openness has a global appeal, like the single, anonymous wallet that turned about $4 million into a $9 million profit on Cabo Verde's World Cup draw with Spain last week, the whole trade visible onchain.