Cboe Global Markets wants to keep it simple with their foray into the prediction market — but is it as easy as they think? The Chicago-based venue for options trading confirmed that it was in early talks with brokerages and market makers, according to a Feb. 2 report in the Wall Street Journal.

At first, one might say, so what? In a space with Kalshi, Polymarket, Gemini, Coinbase and Robinhood, what’s one more prediction market?

Cboe is supposedly exploring a potential “regulated product” that would use “an options structure to offer all-or-none payouts,” according to a report from Reuters. This would be a binary-style payoff that would deliver a fixed return if a specified condition were met, and return nothing if the condition is not met.

Cboe, per the WSJ report, will focus strictly on financial markets. So, yes-no markets on things like if the S&P 500 will close at a certain point at the end of trading.

“Although retail participation in derivatives markets has grown substantially over the years, a binary, all-or-nothing options product would certainly appeal to less experienced investors,” Nic Puckrin, analyst and co-founder of Coin Bureau, told Reuters.

As anyone who bought GameStop stock during 2021 is aware, stocks can be manipulated. So, Cboe hopes to offer a “regulated alternative.” These proposed contracts would meet strict compliance standards and work closely with regulators to ensure there’s proper oversight before listing.

A prediction market seeking more regulation, not less, is uncharacteristic. This attitude appears to align with Commodity Futures Trading Commission Chair Michael Selig’s philosophy on prediction market regulation.

Selig wants the CFTC to deliver the “minimum dose” of regulation after claiming President Joe Biden’s CFTC engaged in “policymaking through enforcement.”

If Cboe wants to attract traders who know their bets are on the up-and-up, implementing its own market regulation and rule enforcement (something the CFTC is in no rush to do) is the way to go.

Bloomberg reported in November 2025 that Cboe was planning to launch its own prediction markets tied to financial events.

“It’s moving quickly, but at the same time, I also think it’s still early stages,” Cboe’s Chief Executive Officer Craig Donohue told the publication. “Our focus right now is on our own organic efforts, which I hope will come to fruition in the next several months.”

The interview came at the time that Cboe’s chief rival, CME Group, announced that it would partner with FanDuel to power a new prediction market-focused app.

Cboe will also shun the allure of sports betting. “I know there’s probably the potential to make money there,” Donohue said. “It’s also fraught with lots of litigation and lots of regulatory risk as well, so that’s for other people. But for Cboe, we’re going to remain focused on things that have financial and economic implications.”

Cboe first attempted a makeshift prediction market in 2008. They launched binary call options tied to the S&P 500 and the Cboe Volatility Index (VIX). These markets allowed traders to bet on where those indexes would close, but they failed to catch on. Eventually, Cboe delisted the markets and moved on.

However, this new initiative is not just those same old markets with a fresh coat of paint. Instead, as Coindesk reports, Cboe is exploring “ways to modernize the concept and appeal to a broader base of retail and institutional users.” A main goal is to give a better end-user experience, with more intuitive market access or clearer contract terms.

While Cboe wants to keep it simple, that is easier said than done. Polymarket has daily S&P markets and Kalshi is all about tracking the price of crypto. Is CBoe betting on there being an untapped customer base of day traders who aren’t on these markets? If so, are there enough to keep the revitalized Cboe market open? 

For some, Cboe’s clear regulation is appealing. Knowing that the market is fair – you never have to argue the ambiguity of an integer – is appealing. But, Cboe needs to be open and up front with how their prediction markets will be regulated. Otherwise, speculators might just stick with the other players in this increasingly crowded market. 

The post Cboe Eyes Regulated Prediction Markets With Options-Style Payoffs appeared first on DeFi Rate.

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