Schwab to Launch S&P 500 Prediction Markets with Cboe

Charles Schwab Eyes Prediction Markets with S&P 500 Wagers

Financial services behemoth Charles Schwab is preparing to enter the rapidly growing prediction markets sector, according to a report from The Wall Street Journal.

The discount brokerage had signaled its intentions earlier this year during its first-quarter earnings call, with CEO Rick Wurster stating the company would “likely have prediction markets.” Wurster, however, differentiated these offerings from those focused on sports, politics, and entertainment, emphasizing a focus on financial market outcomes.

Sources familiar with the matter told The Wall Street Journal that Schwab will facilitate contracts through Cboe Global Markets, enabling users to place wagers on the performance of the S&P 500, the widely followed index representing the largest publicly traded U.S. companies.

These new markets are expected to function similarly to asset price markets offered by existing prediction platforms like Kalshi and Polymarket. In these models, participants are presented with a binary choice: whether an asset will finish above or below a specified price. For instance, on Myriad, a product from Decrypt’s parent company Dastan, users can bet on whether Bitcoin will trade above or below a certain price on a given day and time.

Schwab is also reportedly planning a feature called the “Plus Zone.” This would reward users based on how closely the S&P 500’s closing price aligns with the market’s target number, offering a discounted payout even for predictions that are only partially correct.

The new prediction markets are slated for launch in the coming months. The report suggests that Schwab may eventually expand these offerings to include other indexes and key financial benchmarks.

This move follows Schwab’s recent expansion into cryptocurrency. Last month, the firm launched spot trading for Bitcoin and Ethereum for a select group of its retail customers, a rollout that began after a successful internal pilot program. Further expansion to more customers is anticipated in the coming months.

With $11.8 trillion in total customer assets, Charles Schwab has also expressed interest in the stablecoin market. CEO Rick Wurster indicated last July that offering stablecoins is “something we do want to be able to offer.”

Shares of Charles Schwab Corporation (SCHW) closed down nearly 3% on Thursday, trading around $91.70. U.S. markets will be closed on Friday in observance of the Juneteenth holiday.