Cboe targets prediction market with ‘all-or-nothing’ options revival: WSJ

Major derivatives exchange Cboe Global Markets is exploring a revival of binary options for retail investors, aiming to compete directly with the fast-growing prediction market sector, according to a Wall Street Journal report on Monday. 

The proposed contracts would function as fixed-return derivatives that pay a set amount or expire worthless, mirroring the payoff profile common on prediction platforms. A binary call tied to the S&P 500 at 7,000, for example, would deliver a preset payout if the index closes at or above that level at expiry, and nothing if it settles below, the report said.

Traders on prediction venues use comparable yes-or-no structures, where contracts often trade between $0.01 and $0.99 and settle at $1 for the correct outcome.

Cboe first listed binary options tied to major financial indexes in 2008, but delisted them after they failed to gain traction in a market then dominated by institutional professionals.

The products have also faced regulatory scrutiny. The SEC, in 2013, warned about potential investor losses, and U.S. regulators logged numerous fraud complaints against unregulated binary options websites.

This time, the exchange is framing the rollout around compliance and product design.

JJ Kinahan, Cboe’s head of retail expansion, told the Journal the exchange will “go through a lot of rigor” on legal and compliance requirements before listing any new contracts, which would be regulated by the SEC or CFTC. Kinahan described the potential product as “the new starting point for many people in terms of how to get into the options space.”

Prediction markets hit record volume

Cboe’s discussions come as event-driven trading continues to surge, with traders allocating billions of dollars to contracts tied to sports, politics and financial outcomes, including wagers on NFL games and the selection of a CFTC chair.

Kalshi and Polymarket together logged more than $17 billion in January trading volume, an all-time monthly high, according to The Block’s data dashboard. Kalshi recorded $9.55 billion in January, up from $6.58 billion in December 2025, a roughly 45% increase.

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Polymarket posted about $7.66 billion in January versus $5.31 billion in December last year—a gain of about 44%. January marked the fifth consecutive month of rising activity across the sector.

Recently, Galaxy Research wrote that prediction markets have “entered a new phase of mainstream visibility and capital formation,” citing the expansion of Polymarket and Kalshi and the arrival of new platforms testing alternative market designs. Galaxy added that liquidity remains a constraint even as participation broadens.

Access points are also widening. Coinbase has begun rolling out event-based contracts via Kalshi, while Goldman Sachs is publicly exploring the segment as U.S. regulation evolves.