Cboe aims to simplify trading to a level where it becomes as straightforward as a simple ‘yes or no,’ competing with prediction markets.

The exchange is currently engaged in preliminary discussions regarding a yes-or-no options product that resembles platforms such as Polymarket or Kalshi.

What to know:

• Cboe Global Markets is creating a new options-oriented product that will provide fixed all-or-nothing payouts on yes-or-no event contracts.
• The exchange intends to utilize a conventional options framework to modernize binary-style derivatives for both retail and institutional investors, emphasizing clearer terms and an improved user experience compared to previous binary offerings that did not succeed.
• Cboe is currently in preliminary talks with brokerages and market makers and has yet to establish a launch timeline or identify which events the contracts would encompass.

In this article

XAUTXAUT$4,910.88◢4.42%

Cboe Global Markets has confirmed it is working on a new options-based product that will provide all-or-nothing payouts, a framework that could position the exchange in direct competition with prediction markets like Polymarket, Kalshi, Robinhood and Coinbase.

Cboe, the leading platform for options trading and renowned for establishing the Cboe Volatility Index (VIX), is in initial discussions with brokerages and market makers regarding the functionality of the product, as reported by WSJ earlier.

STORY CONTINUES BELOWDon’t miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newslettersSign me upBy signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.

While specifics are still being worked out, the intention is to utilize a traditional options framework to provide fixed-return results on yes-or-no style event contracts, according to a source familiar with the situation who spoke to CoinDesk.

These kinds of derivatives — often called binary options or fixed-return contracts — enable traders to bet on whether a particular event will take place. Should the event occur, the contract pays a predetermined cash amount. If it does not happen, it settles at zero. This payout structure is akin to the mechanics of prediction markets, where users place bets on various occurrences from central bank decisions to election outcomes.

Cboe has experience with binary-style options. In 2008, the exchange introduced binary call options linked to the S&P 500 and the Cboe Volatility Index (VIX), allowing traders to speculate on whether those indexes would close above a set level. However, these products struggled to gain popularity and were eventually delisted.

This new endeavor, however, is not meant to be a direct revival of those earlier instruments, according to the source who spoke to CoinDesk. Instead, Cboe seems to be looking for ways to modernize the concept and attract a wider audience of retail and institutional participants. A primary focus is to enhance the user experience, possibly by offering more intuitive market access or clearer contract terms.

If launched, this offering could create a niche in a rapidly expanding sector of the derivatives market. Platforms like Kalshi, which is regulated by the CFTC, already provide event-based contracts on macroeconomic results. Polymarket, which operates on a blockchain, has experienced a surge in trading volumes during election cycles and significant geopolitical events. Coinbase (COIN) has also recently introduced prediction markets trading on its platform in collaboration with Kalshi.

The exchange has yet to confirm a timeline, and it remains uncertain which specific events or outcomes the contracts would target.