Cboe Relaunches S&P 500 Binary Options in Direct Competition with Kalshi and Polymarket
Alina Collins
Cboe is bringing back S&P 500 binary options after a decade-long hiatus, adding a proportional-payout "plus" feature — a direct challenge to Kalshi and Polymarket from a fully regulated derivatives exchange.
What exactly is this product?
Clients place a yes/no bet on whether the S&P 500 will hit a specific price level. The outcome is binary; the structure is simple.
In plain terms = you don't need to predict how much the index moves — just answer one question: "Does it reach this level or not?"
The product launches through Interactive Brokers first; Charles Schwab and other brokers are expected to follow.
What does the "plus" feature change?
Traditional binary options pay all or nothing. With "plus," payouts scale proportionally as the index moves in the client's predicted direction, up to 100% at the contract's cap.
This means → traders capture a gradient of "how right" they were, not just "right or wrong" — risk boundaries become more defined.
The underlying mechanism is a vertical spread — buying a lower-strike call and selling a higher-strike call — but the client interface shows a single trade, with the broker assembling the combination behind the scenes.
Why relaunch now?
Cboe first listed S&P 500 and VIX binary options in 2008, but delisted both after failing to attract enough interest — the last SPX binary expired in January 2015, the last VIX binary in August 2017.
The turning point: zero-days-to-expiration (0DTE) S&P 500 options, launched in 2022, pushed retail options volume to record highs. 0DTE contracts now account for 30% of total options volume.
This reflects a validated shift — retail demand for short-duration, outcome-driven trades is real. Cboe's relaunch rides that wave rather than repeating the earlier misfire.
What does this mean for Kalshi and Polymarket?
Nasdaq has also secured regulatory approval and plans to list binary index-option contracts later this year — two major exchanges entering simultaneously.
This means → the prediction-market battle is expanding from non-traditional platforms into the regulated mainstream derivatives arena.
In plain terms = prediction markets used to be the newcomers' turf. Now incumbent exchanges are arriving with licenses, deep liquidity, and established broker networks — how long the first-movers' edge holds is the central question for this space.
Content is for reference only, not financial advice.