Cboe Revives S&P 500 Binary Options to Rival Kalshi, Polymarket

Cboe Global Markets announced Tuesday that it has revived a type of S&P 500 binary option contract after a hiatus of more than a decade, positioning itself to compete with prediction market platforms Kalshi and Polymarket.

The exchange operator is bringing back cash-settled binary options tied to the S&P 500 index, a product that was previously offered but discontinued years ago. These contracts pay a fixed amount if the index settles above or below a specified strike price at expiration, offering a simple yes-or-no payoff structure similar to event contracts popularized by Kalshi and Polymarket. Cboe's move marks a significant expansion of regulated exchange-traded derivatives into territory long dominated by unregulated or lightly regulated prediction markets.

For equities traders, the reintroduction of binary options on the S&P 500 provides a new tool for hedging or speculating on directional moves in the benchmark index with defined risk and reward. Unlike traditional options, binary options have a fixed payout, making them attractive for short-term tactical plays around economic data releases or Federal Reserve decisions. The product also offers retail investors a regulated alternative to prediction platforms, potentially drawing liquidity and attention back to exchange-listed derivatives. For the latest levels on S&P 500 futures and options, traders can check NowPrice's real-time stock quotes.

Market participants will be watching initial trading volumes and open interest in the new contracts to gauge demand. Cboe's move could pressure Kalshi and Polymarket to seek further regulatory clarity or face increased competition from a well-established exchange. The success of these binary options may also influence whether other exchanges list similar products tied to individual stocks or other indices, potentially reshaping the event-contract landscape in the US.