Charles Schwab is preparing to launch prediction markets in collaboration with Cboe Global Markets, according to a Wall Street Journal report citing people familiar with the matter. The discount brokerage will offer contracts allowing users to wager on S&P 500 performance, with a rollout expected in the coming months. CEO Rick Wurster signaled the move during the firm's first quarter earnings call, stating Schwab would "likely have prediction markets" focused on financial benchmarks rather than sports or entertainment. The entry follows Schwab's recent expansion into cryptocurrency spot trading for Bitcoin and Ethereum launched last month, positioning the $11.8 trillion asset manager within the growing prediction markets sector alongside platforms like Kalshi and Polymarket.
Schwab and Cboe Launch S&P 500 Prediction Contracts
Charles Schwab will offer contracts via Cboe Global Markets allowing users to make binary wagers on whether the S&P 500 will finish higher or lower than a specified price. The structure mirrors asset price markets on platforms like Kalshi and Polymarket, where predictors choose between two outcomes for a given benchmark.
The firm will introduce a feature called the "Plus Zone," which pays users based on how close the S&P 500 closes to the market number. This feature provides a discounted multiple payout even when predictions are "mostly right" rather than exact.
According to the Wall Street Journal report, the markets may eventually expand to other indexes or key financial benchmarks beyond the S&P 500.
Schwab Expands Crypto Services With Bitcoin and Ethereum Trading
Last month, Charles Schwab launched spot trading for Bitcoin and Ethereum to a batch of retail users. The launch followed a successful employee pilot program, with a phased rollout to additional customers expected over the next few months.
CEO Rick Wurster expressed interest in stablecoins last July, stating it's "something we do want to be able to offer." The firm manages $11.8 trillion in total customer assets.
SCHW Stock Declines Nearly 3% on Thursday
Shares of SCHW finished down nearly 3% on Thursday, trading around $91.70. U.S. markets are closed Friday for the Juneteenth holiday.
FAQ
What prediction markets will Charles Schwab offer with Cboe?
Charles Schwab will offer contracts via Cboe Global Markets allowing users to wager on S&P 500 performance. The markets provide binary choices on whether the index will finish higher or lower than a given price, with a rollout expected in the coming months.
What is the Plus Zone feature in Schwab's prediction markets?
The Plus Zone is a feature that pays users based on how close the S&P 500 closes to the market number. It provides a discounted multiple payout even when predictions are "mostly right" rather than exact, according to the Wall Street Journal report.
When did Charles Schwab launch cryptocurrency trading?
Charles Schwab launched spot trading for Bitcoin and Ethereum last month to a batch of retail users. The launch followed a successful employee pilot, with a phased rollout to more customers expected over the next few months.
