Exchange operator Cboe Global Markets said on Monday it is launching a new prediction markets framework that adds a partial-payout structure beyond traditional yes-or-no event contracts.
The proprietary, patent-pending framework allows three possible outcomes on any contract: a $0 payout, a partial payout within a defined “payout zone,” or a full $100 payout. In practical terms, traders who are directionally correct but miss the exact target can still collect a partial return, rather than losing everything.
Cboe plans to deploy the framework first through a Mini S&P 500 Index prediction market contract, expected in Q2 2026. The product will be listed on Cboe Options Exchange, centrally cleared by OCC, and cash-settled using what the company calls a “traditional options wrapper.”
The structure borrows from vertical spreads, a popular limited-risk options strategy where traders express a directional view with capped upside and downside. Cboe is packaging that mechanic as an accessible event contract.
“What sets our products apart from other SPX event contracts is that ours are built directly on top of the SPX options ecosystem, one of the deepest and most liquid options markets in the world,” said Rob Hocking, Global Head of Derivatives at Cboe. “This means that pricing is grounded in real market activity, and customers can benefit from the transparency, liquidity and safeguards of our regulated securities exchange.”
There is existing demand for the kind of defined-risk, directional trading the product targets. In 2025, vertical spread trades in 0DTE SPX options averaged roughly 580,000 contracts per day.
The launch arrives as major exchange operators compete to capture market share in event-based trading. Nasdaq is seeking SEC approval for prediction-market-style options tied to stock indexes, while Intercontinental Exchange has invested up to $2 billion in Polymarket. Both platforms gained prominence during the 2024 US election cycle.
US regulators are also actively shaping the rulebook. The CFTC submitted an advance notice of proposed rulemaking to the president’s budget office on March 2 and recently filed an amicus brief in a Ninth Circuit case involving the legal status of event contracts.
Cboe’s move positions its new contracts inside existing listed-market infrastructure as demand and regulatory attention around prediction markets increase.
