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- Charles Schwab is reportedly entering the prediction market space in collaboration with Cboe Global Markets.
- The company had previously reported that it might look to add predictive markets, but not for sports or entertainment.
- Markets will instead focus on the performance of the S&P 500 initially, which is expected to roll out in the coming months.
Global financial giant Charles Schwab is preparing to test its mettle in the booming prediction markets industry, according to a recent report. New report from Wall Street Journal.
The discount brokerage raised its hand earlier this year during a first-quarter earnings call, with CEO Rick Worster Saying that it “potentially has predictive markets.” But Wurster distinguished between financial market offerings and those that allow users to bet on sports, politics and entertainment.
According to the report, which cites people familiar with the matter, Schwab will offer contracts through Cboe Global Markets that allow people to bet on the performance of the S&P 500, the popular stock index that tracks a basket of the largest publicly traded companies.
The markets will operate similarly to the asset price markets provided by prediction markets such as Calci and Polymarket, where forecasters are provided with a binary choice as to whether an asset will finish above or below a certain price.
For example, in Myriad — a product of Decryption Parent company, Dastan, forecasters can bet on whether it will or not Bitcoin price will be above $62,000 On a specific day and time.
The company is also expected to introduce a feature called “Plus Zone,” which pays people based on how close the S&P 500 index is to the market number, and pays discounted amounts even if they are “mostly right.”
Charles Schwab Markets is scheduled to roll out in the coming months and may eventually be benchmarked against other key indexes or financial benchmarks, according to the report.
Last month, Schwab Expanded its customer offeringslaunch of instant trading for Bitcoin and Ethereum For a group of retail users. The launch came after a successful employee experience, with a gradual rollout to a larger number of customers expected over the next few months.
The company, which has $11.8 trillion in total client assets, has also shown some interest in joining the growing stablecoin opportunity, with Wurster saying last July that it was “something we want to be able to offer.”
SCHW shares finished down about 3% on Thursday, trading at about $91.70. US markets are closed on Friday for the Juneteenth holiday.
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