Cboe revives S&P 500 binary options, chasing the market Polymarket popularized

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.