Image Credit: Cboe
Key Takeaways
- Cboe launched Cboe Predicts with binary options on the Mini-S&P 500 Index (XSP), cleared through the OCC and available first via Interactive Brokers.
- Each contract offers a yes-or-no position paying $100 if the index settles at or above (or below) a chosen level at expiry.
- The launch arrives as prediction market open interest reached a record $1.48 billion, with Cboe joining Polymarket and Kalshi in the space.
Cboe Global Markets has introduced the first product under its new Cboe Predicts suite, listing binary options on the Mini-S&P 500 Index (XSP) through Interactive Brokers, with Charles Schwab access to follow in the coming months and additional brokers planned thereafter.
Cboe Predicts Debuts With XSP Contracts Cleared Through OCC
The contracts, listed under the symbols XSPBW and XSPBX, are cleared centrally through the Options Clearing Corporation. Cboe said in its press release:
“Cboe Predicts represents the latest expansion of Cboe’s S&P 500 Index (SPX) product suite. XSP allows customers to trade on the performance of the S&P 500 Index (SPX) but is scaled to 1/10th the size of SPX, making it a smaller, more retail-friendly alternative.”
Each contract presents a binary yes-or-no position on where the index closes. A “yes” position pays $100 if the index settles at or above a chosen level; a “no” position pays the same if it settles below.
Cboe Cites Market Integrity Goals and Prediction Market Growth at Launch
According to Cboe, XSPBW and XSPBX contracts are available in weekly and daily expirations, giving traders the ability to take short-duration positions on S&P 500 direction without the settlement complexity of standard index options. Because the maximum payout is capped at $100 and the contracts are exchange-listed, the risk profile is defined at entry, which Cboe has positioned as a key differentiator from unregulated prediction market platforms.
Rob Hocking, Cboe’s Global Head of Derivatives, framed the product as an effort to raise standards across the prediction markets sector. In a statement, he said:
“We look forward to bringing our experience, trusted market infrastructure, and the deep liquidity of the SPX options ecosystem to prediction markets. Our goal is to help set a higher standard for market integrity, product design and investor protection.”
Cboe also cited growing retail demand for short-duration options products as a factor in the launch.
Sector Open Interest Hit a Record $1.48 Billion Ahead of the Launch
Cboe said the launch arrives as prediction markets record peak activity, with open interest across the sector recently reaching an all-time high of $1.48 billion. The company also said it plans to add XSP vertical spreads through its patent-pending Quoted Spread Book.
Cboe is among the latest established financial firms to enter the prediction markets space alongside platforms such as Polymarket and Kalshi. Kalshi received CFTC approval to list federal funds rate contracts in 2023 and has since expanded into election and economic event markets. Polymarket operates offshore and processes billions in monthly volume. Cboe’s entry brings exchange-regulated infrastructure and OCC clearing to a category that has until now been dominated by lightly regulated or offshore platforms.
