Derivatives and securities exchange network Cboe Global Markets, Inc today announced its vision for a new and innovative prediction markets framework that aims to redefine how people engage with outcome-based trading.

Drawing inspiration from concepts in the traditional options markets, Cboe’s new product suite will introduce a fresh approach that moves beyond the limitations of traditional binary event contracts.

Today’s event contracts only offer two binary outcomes: “yes or no,” “all or nothing.” Cboe’s prediction markets will introduce a third dimension – a new middle ground – enabling customers to engage with defined risk, while gaining the opportunity to earn a partial payout when they are directionally correct, even if the result is not precisely on their target.

Under Cboe’s new proprietary and patent-pending framework, customers could participate in contracts that deliver three potential payout outcomes: a $0 payout, a partial payout within a defined “payout zone,” or a full $100 payout.

Cboe plans to offer this framework first through a Mini S&P 500 Index prediction market contract. This will allow traders to express their outlook on the U.S. equity market – such as where the S&P 500 Index (SPX) may close at the end of a trading day – by taking a traditional “yes” or “no” position, or by leveraging the added “payout zone” position to reduce potential losses and potentially benefit from being directionally correct without needing to make a perfect call.

“Our new prediction market contracts essentially take the mechanics of a traditional vertical spread – one of the most popular options strategies – and package them in an intuitive, accessible format for a broader audience,” said JJ Kinahan, Head of Retail Expansion and Alternative Investment Products at Cboe. “These contracts will offer greater flexibility and clearly defined risk compared to traditional event contracts, along with the opportunity to earn a partial return when traders are directionally correct. Real-world opinions aren’t always binary, and investors shouldn’t be confined to a yes-or-no framework. Our more nuanced model is designed to reward informed perspectives – giving retail traders credit even when they are mostly right – and introduce an entirely new way for people to engage with outcome-based trading that simply doesn’t exist today.”

Cboe plans to launch its first Mini-SPX prediction market contract in the second quarter of 2026. The product will use a traditional options wrapper to deliver fixed-return outcome and settle in cash, similar to standard index options. This securities-based product will be listed on Cboe Options Exchange and centrally cleared by OCC.

In addition to enabling greater accessibility and participation in outcome-based trading, Cboe expects its new prediction market contract could also provide an entry point for people to enhance understanding, and over time, explore more advanced options strategies. At their core, options allow traders to express a view, potentially generate income, or manage risk around future events and the probability of different outcomes.

“There is clear customer demand to trade around market events tied to the S&P 500 Index, and our new SPX prediction market contracts will just make it easier for even more people to participate in that activity,” said Rob Hocking, Global Head of Derivatives at Cboe. “What sets our products apart from other SPX event contracts is that ours are built directly on top of the SPX options ecosystem – one of the deepest and most liquid options markets in the world. This means that pricing is grounded in real market activity, and customers can benefit from the transparency, liquidity and safeguards of our regulated securities exchange. As the home of SPX options, Cboe is uniquely positioned to bring this product to market in a way that reflects the strength and integrity of the broader SPX ecosystem.”

“We are proud to support continued innovation within the S&P 500 ecosystem. Cboe’s planned prediction market contracts help new investors benefit from the market leading integrity, governance, and reliability of the S&P 500, within a simple and easy-to-access contract structure,” said Cameron Drinkwater, Chief Product & Operations Officer at S&P Dow Jones Indices.

“As the leader in retail options trading and a close partner of Cboe, we are pleased to see Cboe continue to innovate in the financial markets and look forward to continually enabling new instruments as we see the client demand,” said James Kostulias, Head of Trading Services at Charles Schwab.

Cboe may extend its prediction market framework to offer more contracts on additional indices or stocks in the future.