Cboe Revives Binary Options After Decade, Escalating Challenge to Kalshi and Polymarket

Cboe Global Markets is relaunching binary options more than a decade after exiting the business, marking a broader push into the fast-growing prediction-market arena.

Bloomberg reported on June 23 that Cboe will list binary options tied to the S&P 500 Index. The contracts let investors trade on a simple yes-or-no view of whether the S&P 500 will reach a specific price level.

The product will initially be available through Interactive Brokers. Cboe plans to expand access later through major brokerages including Charles Schwab.

The launch comes as prediction-market platforms Kalshi and Polymarket gain popularity. Cboe said demand for short-term directional trades has risen sharply since the 2022 debut of zero-day-to-expiration, or 0DTE, S&P 500 options.

"Investor demand for short-term, outcome-based products has continued to grow since the success of 0DTE options," JJ Kinahan, Cboe's head of retail expansion and alternative investment products, said. He added that expanding into prediction markets was a natural next step.

Cboe previously launched binary options tied to the S&P 500 and the Cboe Volatility Index, or VIX, in 2008, but later discontinued them because of weak investor interest. Trading in S&P 500 binary options ended in 2015, while the VIX-based product stopped trading in 2017.

Unlike existing prediction-market products, the new contracts use an options spread structure. That allows investors not only to bet on the outcome itself but also to earn returns in stages if the index moves in the expected direction. Bloomberg also reported that Nasdaq is preparing to launch a similar binary options product later this year, setting up a more intense battle in prediction markets.