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ToggleThe prediction market is seeing a strong entry from traditional financial giants. On March 9th, Taipei time, Cboe Global Markets (CBOE), one of the world's largest derivatives and securities exchange groups, officially announced the launch of a new "prediction market product framework." This framework pioneers a contract structure with three possible outcomes, breaking the traditional binary framework of "all or nothing" for event contracts. CBOE plans to launch its first prediction market contract based on the Mini S&P 500 Index (Mini-SPX) as early as the second quarter of 2026.
Breaking through the "yes/no" binary: Adding a third dimension of "partial profit range"
The core innovation of Cboe's new framework lies in adding a "Payout Zone" between the traditional "full $100 payout upon reaching the target price" and "zero payout upon exiting the trade." Under this framework, traders have three possible settlement results:
Zero out ($0 earnings), partial earnings (falling into the Payout Zone), full earnings ($100 settlement).
This means that even if traders do not accurately predict the final outcome, as long as the direction is correct and falls within the preset range, they can obtain a partial return—instead of getting nothing like traditional binary contracts.
JJ Kinahan, head of retail expansion and alternative investment products at Cboe, said that real-world perspectives are not black and white and investors should not be confined to a "yes or no" framework; this more sophisticated model is designed to reward insightful judgments, allowing retail investors to be rewarded even if they "guess the direction but miss the bullseye".
Inspired by vertical spreads: a "popular" packaging of the option logic
In its official statement, Cboe stated that the design of this contract was inspired by the vertical spread strategy in the traditional options market, one of the most popular options strategies among retail investors. Rob Hocking, Global Head of Derivatives at Cboe, pointed out that this product essentially repackages the vertical spread mechanism into a more intuitive and accessible form, making it available to a wider audience, and emphasized:
"There is a clear demand for event trading around the S&P 500 index, and the new contracts simply make it easier for more people to participate."
Data also supports this trend: In 2025, the average daily trading volume of vertical spreads for 0DTE (expiring on the same day) SPX options was close to 580,000 contracts , indicating that the market demand for directional, limited-risk trading strategies remained strong.
Product Specifications: Mini-SPX, OCC Clearing, Launching in Q2
The first product uses the Mini S&P 500 Index (Mini-SPX) as a benchmark, allowing traders to express their views on the US stock market trend (e.g., whether the S&P 500 closed above a certain level today). Specific specifications are as follows:
The contracts are securities-based, packaged as options, and settled in cash, similar to standard index options. They are listed on the Cboe Options Exchange and centrally cleared by the OCC (Options Clearing Corporation) . Cboe is currently patent-pending for this framework.
Cboe also stated that it plans to expand this framework to more index or individual stock contracts in the future, but will initially focus on the SPX ecosystem. Cboe believes that building on the world's most liquid index options market will ensure that pricing is closer to real market activity and that transparency and risk management mechanisms are more robust.
Background: Traditional exchanges are accelerating their expansion into the prediction market.
This announcement by Cboe marks a key step in its entry into the prediction market space. Back in early February 2026, CoinDesk reported that Cboe was in secret talks with brokers and market makers about related products, foreshadowing today's official announcement. Hocking, Cboe's head of derivatives, stated in the February earnings call that prediction markets are a "logical extension" of Cboe's existing strengths, not only attracting new customers but also serving as an entry point for users to explore a broader range of Cboe products.
It's noteworthy that Cboe's entry into the market coincides with the US SEC and CFTC both providing clearer regulatory frameworks for prediction markets. Compared to existing platforms like Polymarket (operating on blockchain technology, partially subject to regulatory controversy) and Kalshi (regulated by the CFTC), Cboe, as a licensed and regulated exchange, coupled with the OCC clearing system, offers institutional investors and mainstream brokerages greater certainty regarding compliance.
In fact, prediction markets have attracted the attention of several traditional financial institutions in recent years: Coinbase previously partnered with Kalshi to launch prediction market trading functionality, and Robinhood has also ventured into this field. Cboe's entry with its "option technology foundation + regulatory compliance + innovative three-outcome framework" has made it one of the most integrated competitors among traditional exchanges.
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