Cboe Discusses Reintroducing All-or-Nothing Options to Compete Against Prediction Markets

Cboe Considers Reviving Binary Options for Retail Investors

Cboe Global Markets is currently in preliminary talks with retail brokerages about bringing back “all-or-nothing” options contracts aimed at individual traders, potentially positioning themselves as competitors to prediction markets.

According to Cboe, these discussions are still in their early phases. The exchange is also consulting with market makers about the structure of these contracts, which may take the form of updated binary options—also known as fixed-return contracts. Binary options allow traders to make straightforward yes-or-no bets on specific outcomes.

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Similar to contracts on prediction markets, these derivatives either pay a predetermined amount or nothing at all. For instance, a binary call option linked to the S&P 500 closing at 7000 would reward the holder with a fixed payout if the index finishes at or above that level at expiration; otherwise, the entire investment is lost.

This initiative would place Cboe in direct rivalry with prediction market platforms. Platforms like Kalshi and Polymarket have seen a surge in users over the past year, as more retail investors have embraced higher-risk trades and grown confident in forecasting outcomes of events such as the Super Bowl, stock market trends, and entertainment awards.

Both Kalshi and Polymarket operate as exchanges, where users’ bets function as another type of derivative contract. These wagers, typically priced between one cent and 99 cents, reflect the market’s collective view on the likelihood of an event. When the outcome is determined, those who guessed correctly receive $1, while losing participants forfeit their stake.

“We’re looking to enter the event-driven contract space, offering straightforward event-based products similar to those on other platforms,” explained Rob Hocking, Cboe’s global head of derivatives.

One key distinction is that Cboe plans to remain focused on financial markets. The exchange hopes that, over time, investors who start with all-or-nothing options will progress to more advanced trading instruments.

Cboe previously introduced binary call options tied to the S&P 500 and the Cboe Volatility Index back in 2008, but these products failed to gain traction among retail investors and were eventually removed from the market.

Renewed Interest in Options and Prediction Markets

The stock market’s rebound following the Covid-19 downturn reignited enthusiasm among American investors. In recent years, many have moved beyond traditional stocks and ETFs, exploring more complex—and often riskier vehicles like options. According to the Options Clearing Corp (OCC), a record average of 61 million options contracts were traded daily in 2025.

Day trading has made a comeback, and the growing popularity of prediction markets is a direct result of this renewed confidence and the accessibility of sophisticated trading tools via mobile devices.

Binary options have a complicated reputation on Wall Street, often linked to high-risk behavior and fraudulent activity. The Securities and Exchange Commission cautioned in 2013 that, on average, investors could expect to lose money with these products.

Regulators, including the SEC and the Commodity Futures Trading Commission, have also received numerous complaints about unregulated websites offering binary options trading, which have led to cases of identity theft, manipulated outcomes, and refusal to pay out winnings.

JJ Kinahan, who leads Cboe’s retail expansion and alternative investment products, stated that the exchange will implement strict legal and compliance measures before launching these new contracts, which would fall under the oversight of either the SEC or CFTC.

“For many, this represents a new entry point into the world of options,” Kinahan remarked.