Cboe Eyes Prediction Market Turf With New 'Yes-or-No' Options Product
In a strategic move that could reshape the boundaries between traditional finance and event-driven trading, Cboe Global Markets is quietly developing a new options product designed to offer simple "yes-or-no" outcomes. The initiative, confirmed by the exchange, would see it enter direct competition with a new generation of prediction market platforms like Kalshi and Polymarket.
According to sources familiar with the discussions, Cboe—home to the VIX "fear index" and a cornerstone of the U.S. options market—is in preliminary talks with brokerages and market makers. The goal is to structure a product using a traditional options framework to deliver fixed-return payouts based on whether a specific event occurs. This mirrors the core mechanic of prediction markets, where users speculate on outcomes ranging from election results to Federal Reserve decisions.
While details are still being finalized, the product would function similarly to binary or fixed-return contracts. A trader wagering on a "yes" outcome receives a predetermined cash payout if the event happens; a "no" bet settles at zero. This simplicity is a marked departure from the complex pricing of standard options and is seen as a bid to attract a broader audience.
Cboe has prior experience with binary-style options, having launched products tied to the S&P 500 and VIX in 2008. Those instruments failed to gain lasting traction and were eventually delisted. However, a person close to the current project emphasized this is not a simple relaunch. Instead, Cboe is seeking to modernize the concept, focusing on user experience, clearer terms, and easier market access to appeal to both retail and institutional participants.
The potential market is significant. Regulated platforms like Kalshi have seen growing demand for event contracts, while blockchain-based Polymarket has reported surging volumes during major political events. Even crypto exchange Coinbase recently entered the space via a partnership. Cboe's entry would lend mainstream credibility and regulatory heft to a niche but expanding corner of finance. Analysts suggest it could also spark debates over the classification of such instruments—as financial derivatives or speculative betting tools.
The exchange has not disclosed a launch timeline or specified which events might be targeted. Its move underscores a broader trend of traditional financial institutions seeking to capture market share from agile fintech and crypto-native rivals by adopting their most popular features.
Market Voices
David Chen, Portfolio Manager at Horizon Capital: "This is a logical evolution for Cboe. They're leveraging their trusted infrastructure to democratize a type of exposure that's been gaining popularity. For institutions, it could offer a novel way to hedge event risk."
Maya Rodriguez, Retail Trading Analyst: "If they get the UX right, this could be huge. Simplifying options to a yes/no question opens the door for so many more people who find traditional options intimidating."
Franklin Pierce, Editor at 'The Skeptical Trader' blog: "This is just dressing up gambling in a suit and tie. Calling it an 'options product' doesn't change the fact that you're betting on binary outcomes. Cboe is chasing retail speculation dollars and blurring the line between a financial exchange and a sportsbook."
Dr. Anya Sharma, Fintech Professor at Stanford: "The regulatory implications are fascinating. Cboe's involvement forces a conversation about how these contracts are defined and overseen, which could ultimately bring more clarity to the entire prediction market ecosystem."