Cboe Targets Prediction Market Entry With All-or-Nothing Options: Report

Cboe Global Markets will consider its plans for bringing back binary options for retail traders on Monday, the Wall Street Journal reported. This comes after a rise in the number of event-driven options traded across the US markets and an increase in activity on regulated prediction markets this year.

Cboe is assessing fixed return derivatives that pay a fixed sum or expire worthless. A binary call option based on the S&P 500 index at 7,000 would result in a payout if the index closes at or above that level, while it would yield no payout if the index closes below that level.

The prediction markets employ the same yes/no settlement mechanism. Contracts are bought at prices between $0.01 and $0.99. These contracts settle at $1 if the selected outcome happens at expiration.

Cboe introduced binary options in 2008. The exchange later removed them due to weak adoption. Institutional traders dominated activity, and retail participation stayed limited.

Cboe Navigates SEC and CFTC Oversight

U.S. regulators have expressed concerns. The SEC had issued warnings in 2013 regarding losses suffered by investors in binary options. Regulators reported numerous fraud cases involving unregistered offshore platforms.

Cboe Exchange plans to create a compliant binary option product. JJ Kinahan, head of retail expansion for Cboe Exchange, says that the organization will carry out strict legal and compliance checks. It will provide a clear entry point for new users of options. This can help users understand risk, as it is a defined payout.

Also Read: Prediction Markets Surge to Record $702 Million Despite Regulatory Headwinds

Event-driven trading is still a rapidly expanding market. There is a lot of trading in outcomes like sports games, politics, and financial decisions. There is trading in NFL games and future CFTC leadership.

Prediction Markets See Record Growth

The combined January trading volume for Kalshi and Polymarket exceeded $17 billion. Kalshi reported a volume of $9.55 billion, up from $6.58 billion in December, a rise of 45%. Polymarket reported a volume of $7.66 billion, up from $5.31 billion in December, an increase of about 44%.

The sector has now seen five consecutive months of increasing activity. Galaxy Research has reported that prediction markets are in a new era of visibility and participation. Galaxy Research has also reported that liquidity is a limiting factor for many contracts.

Event-driven products are becoming more accessible. Coinbase has now made event contracts available on Kalshi. Goldman Sachs is exploring the markets, awaiting developments in U.S. regulatory talks.

Cboe’s review is a significant development for traditional exchanges. The company recognizes an opportunity to reintroduce regulated binaries. The opportunity is in line with growing retail demand and accelerating event-driven trading.

Also Read: Galaxy Digital to Launch $100M Crypto Hedge Fund in Q1 2026