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A major US exchange operator is exploring a new way to trade event outcomes, potentially placing it in direct competition with fast growing prediction markets. The concept centers on fixed payouts tied to clear yes or no results, but with a very different regulatory posture.
Good to Know
Cboe Global Markets is developing an options based product that would pay a fixed amount if a specific outcome occurs and nothing if it does not. If launched, the structure would resemble prediction market contracts while operating within a regulated financial framework.
Early discussions are already underway. According to reporting from The Wall Street Journal, the Chicago based exchange has started conversations with brokerages and market makers to determine how the product could function in live markets.
The concept relies on binary style outcomes. Each contract would settle at a set value if the defined condition is met, or zero if it is not. The payoff design mirrors how prediction markets work, where participants take positions on whether an event will happen.
Platforms such as Kalshi and Polymarket already use similar logic across politics, sports, entertainment, and other categories. Both have seen record activity, particularly tied to sports related contracts.
Cboe plans to take a narrower path. The exchange intends to focus only on financial and economic events and does not plan to offer sports contracts. Leadership cited regulatory complexity as a reason to stay away from that segment.
“I know there’s probably the potential to make money there,” said Craig Donohue. “It’s also fraught with lots of litigation and lots of regulatory risk as well, so that’s for other people. But for Cboe, we’re going to remain focused on things that have financial and economic implications.”
The idea itself is not new inside the company. In 2008, Cboe launched binary call options that allowed traders to take positions on whether major indexes would close above specific levels. Those products linked directly to the S&P 500 and the Cboe Volatility Index.
That earlier effort failed to attract sustained interest. Trading volume never reached meaningful levels, and the contracts were eventually removed from the market.
Executives say the current plan does not aim to revive the 2008 structure. Instead, the exchange is revisiting the underlying idea with the expectation that market conditions and user behavior have changed heading into 2026.
A central goal involves accessibility. Cboe wants to design a product that more users can understand quickly, reducing complexity around pricing and outcomes. Internal discussions focus heavily on user experience and clarity, rather than recreating older institutional trading tools.
By keeping the scope limited to regulated financial markets, Cboe aims to offer a simpler event driven instrument without stepping into areas already under regulatory pressure.
Cboe is exploring an options based product with fixed all or none payouts tied to specific financial outcomes.
Each contract would pay a set amount if the event occurs or settle at zero if it does not.
No. The company has stated it will avoid sports contracts and remain focused on financial and economic events.
Yes. Binary call options launched in 2008 but failed to gain traction and were later delisted.
The payout structure is similar, but Cboe plans to operate fully within regulated financial markets.