TLDR
- Cboe plans to launch prediction market contracts with partial payouts, moving beyond all-or-nothing bets
- The new format is inspired by betting apps and options market vertical spreads
- Cboe will debut the framework with a Mini S&P 500 Index prediction market contract
- Nasdaq is seeking SEC approval for similar prediction market options tied to major stock indexes
- Intercontinental Exchange has invested up to $2 billion in crypto prediction platform Polymarket
Cboe Global Markets announced on Monday it will launch a new type of prediction market contract that pays out based on how accurate a trader’s prediction is, not just whether they got it right or wrong.
Cboe to launch prediction market contracts beyond binary bets, offering partial payouts
More Here → https://t.co/4lo1KziIyR pic.twitter.com/HxjigrxjTv
— PiQ (@PiQSuite) March 9, 2026
This is a departure from the current all-or-nothing model used in most prediction markets today. The new format means traders can receive partial payouts depending on how close their prediction was.
The idea is borrowed from two places. First, betting apps that let users cash out early as an event unfolds. Second, traditional vertical spreads in the options market, where profit and loss can vary across a range.
JJ Kinahan, Head of retail expansion and alternative investment products at Cboe, explained the thinking. “Real-world opinions aren’t always binary, and investors shouldn’t be confined to a yes-or-no framework,” he said.
Cboe plans to roll out the new framework starting with a Mini S&P 500 Index prediction market contract. This comes after the exchange had already been working on a separate regulated product using an options structure with all-or-none payouts.
Major Exchanges Are Racing Into Prediction Markets
Cboe is not alone in this push. Large U.S. exchange operators have been moving into the prediction market space at a fast pace.
Prediction markets rose to mainstream attention during the 2024 U.S. presidential race. Since then, the sector has attracted serious institutional interest.
Nasdaq is currently seeking approval from the Securities and Exchange Commission to launch prediction market style options linked to major stock indexes. No approval date has been confirmed yet.
Intercontinental Exchange has taken a different route. It has invested up to $2 billion in Polymarket, a well-known crypto-based prediction platform.
What This Means for Traders
The partial payout structure gives traders more flexibility than a straight yes or no bet. It rewards predictions that are directionally correct, even if they are not exactly right.
This approach is more familiar to retail traders who already use options or have used sports betting apps. It lowers the stakes of being slightly wrong.
Cboe’s move signals a broader shift in how regulated exchanges are thinking about event-based products. The exchange has been one of the more active players in exploring new market structures.
The Mini S&P 500 contract will be the first test of this new framework in a live market setting.
Cboe’s stock was up 0.31% on the day of the announcement, while Nasdaq fell 1.04% and Intercontinental Exchange dropped 0.57%.
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