CoinDesk
Cboe is reintroducing S&P 500 binary options, yes-or-no contracts paying out if the index crosses a set level, after pulling similar products more than a decade ago. The exchange is also adding a variant built on a vertical spread that pays proportionally as the index moves, a partial-payout structure designed to compete directly with the outcome-based products that Polymarket and Kalshi turned into one of the internet's fastest-growing trading niches.
The exchange is leaning on demand it has already measured: same-day S&P 500 options now make up roughly 30% of U.S. options volume. Interactive Brokers will carry the new binary contracts at launch, with Charles Schwab adding access later this year. Milan Galik, CEO of Interactive Brokers, framed the rollout as a response to investors who want to "express a specific view on future events and market outcomes."
Why it matters
Cboe's first attempt at S&P 500 binary options, launched in 2008 alongside a Cboe Volatility Index variant, never drew enough interest and was wound down by 2017. What changed since is the cultural and financial success of prediction markets. A Polymarket position on "What will S&P 500 hit by end of June?" has already traded more than $528,000 in volume, and Kalshi's year-end S&P 500 contract is carrying more than $4 million in open interest. The message to incumbents is that retail is comfortable paying for a clean directional view.
The competitive field is crowding fast. Meta said this week it is building a prediction-market app, and Nasdaq secured clearance to list its own binary index options later this year. Cboe's twist is the "plus" structure, a vertical spread that lets a trader bank partial payouts as the index moves rather than waiting on a binary yes/no settlement. Behind the scenes, the broker is placing a bought call funded by a sold call at a higher strike, two linked options acting as one instrument.
Market impact
The TradFi entrants are tamer by design. Cboe's binary contracts are regulated instruments sold through U.S. brokerages, while Polymarket runs onchain, settles in USDC, and is open worldwide without sign-up.
Frequently asked questions
-
Why is Cboe bringing back S&P 500 binary options now?
The exchange first tried in 2008 and shelved the product by 2017, but Polymarket and Kalshi have since proved retail will trade outcome-based contracts at scale. Cboe is reusing the format now that the demand signal is measurable.
-
How does Cboe's new binary option differ from Polymarket's?
Cboe's contracts are regulated instruments distributed through U.S. brokerages like Interactive Brokers and Charles Schwab. Polymarket runs onchain, settles in USDC, and is open worldwide without sign-up. Same yes/no shape, different rails.
-
What is the "plus" feature Cboe is adding?
Plus is a vertical spread, a bought call at a lower strike funded by a sold call at a higher one, that pays out proportionally as the index moves. Traders bank partial winnings instead of waiting on a binary yes/no settlement.
-
Who else is competing in the prediction-market space?
Polymarket and Kalshi lead on the crypto-native side. Meta said this week it is building a prediction-market app, and Nasdaq has clearance to list its own binary index options later this year.
-
How much retail demand is already on these products?
A Polymarket position on where the S&P 500 lands by end of June has traded more than $528,000 in volume. Kalshi's year-end S&P 500 contract is carrying more than $4 million in open interest, with month-end bets at $863,000.
Lookonchain
TheBlock
CryptoSlate
WuBlockchain