Charles Schwab is working with Cboe Global Markets to introduce contracts that would allow clients to make yes or no predictions about the performance of the S&P 500, according to a Wall Street Journal report.
The brokerage plans to make the products available in the coming months, marking its first move into the growing market forecasting industry.
The contracts will use a binary options structure. They will pay a fixed amount of cash if the S&P 500 closes above or below a predetermined level and nothing if the condition is not met.
The products differ from futures contracts offered by traditional market forecasting platforms, but offer a similar fixed outcome structure.
Schwab is also preparing a related Cboe product with a feature known as zone plus, which offers a partial payout when a trader has a correct direction but the index does not finish at the exact target.
Cboe introduced this framework earlier this year as an alternative to standard all-or-nothing contracts. Its initial products are linked to the Mini S&P 500 Index and settled in cash.
The move places Schwab alongside brokerages such as Robinhood and Interactive Brokers, which have already expanded into event-driven financial contracts.
Schwab Chief Executive Officer Rick Wurster previously said the company was more interested in forecasting financial market-related products than contracts based on sports, politics or entertainment.
The planned offering will remain focused on market outcomes, allowing Schwab to enter the sector through regulated options products rather than broader event betting.
