Cboe Eyes Retail Market with 'All-or-Nothing' Options, Challenging Prediction Platforms

Cboe Global Markets is exploring a return to the binary options arena, holding preliminary discussions with retail brokerages and market makers to launch new "all-or-nothing" contracts aimed at individual investors, sources familiar with the matter said. The move would position the established exchange operator in direct competition with fast-growing prediction markets like Kalshi and Polymarket.

These proposed contracts, a revamped version of fixed-return or binary options, would allow traders to make simple yes-or-no bets on market outcomes—such as whether the S&P 500 will close above a specific level. If the condition is met by expiration, the holder receives a predetermined cash payout; if not, the entire investment is lost. This structure mirrors the mechanics of prediction markets, which have surged in popularity as retail traders seek more accessible, event-driven financial instruments.

"We see an opportunity to enter the event-trading space with a simplified, regulated product that meets investors where their interest is growing," said Rob Hocking, Cboe's global head of derivatives, in an interview. "It's about providing a familiar, exchange-listed alternative."

The strategy marks a significant shift. Cboe first listed binary options tied to the S&P 500 and the VIX volatility index in 2008, but delisted them due to lackluster demand in a market then dominated by professionals. The post-pandemic retail trading boom, fueled by commission-free brokers and mobile apps, has rewritten that playbook. Daily options volume hit a record average of 61 million contracts in 2025, according to the Options Clearing Corp., signaling a newfound comfort with complex derivatives among everyday investors.

However, Cboe intends to draw a clear regulatory line. Unlike prediction markets that allow wagering on political events or award shows, Cboe's contracts will be strictly financial, tied to market indexes and potentially other asset classes. The exchange plans to submit the products for review by either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

This cautious approach stems from a checkered history. Unregulated offshore binary options platforms have long been associated with fraud and investor abuse, prompting warnings from the SEC and CFTC over a decade ago. "We are committed to going through rigorous legal and compliance checks to ensure this is a transparent, trustworthy offering," emphasized JJ Kinahan, Cboe's head of retail expansion.

Analyst & Investor Commentary:

"This is a smart, defensive play by Cboe. They're acknowledging the demand shift toward simplified, event-based trading but bringing it into a regulated framework. It legitimizes a trend while mitigating the reputational risk of the old binary options world." – Maya Chen, Senior Market Structure Analyst at Finley Advisory

"It's about onboarding. A simple 'up or down' bet on the S&P could be a gateway product. Once investors are comfortable, the natural progression is toward more sophisticated multi-leg options strategies, which is where Cboe's core business lies." – David Park, Portfolio Manager at Horizon Capital

"Are we serious? This is just dressing up casino-style betting in a Wall Street blazer. The 2008 version failed, and the offshore frauds ruined the name for a reason. 'Simplified' for retail often means 'easier to lose money.' The SEC should scrutinize this intensely." – Rebecca Vance, Founder of Investor Protection Watchdog

"The timing is key. Prediction markets have done the heavy lifting of educating a new generation. Cboe isn't creating demand; it's stepping in to capture it with the trust and infrastructure of a regulated exchange. That's a powerful combination." – Arun Mehta, Fintech Venture Capitalist

If approved, the new contracts could launch as early as next year, testing whether the allure of prediction-market simplicity can be successfully harnessed within the traditional bounds of financial regulation.