Schwab, Cboe Launch S&P 500 Yes-or-No Options

Charles Schwab is partnering with Cboe to introduce exchange-traded S&P 500 yes-or-no binary options that deliver a predetermined payout if a specified index condition is met at contract expiration.

Under the arrangement, Cboe will list and trade the new contracts tied to the S&P 500 index, and Charles Schwab will make the products available to eligible clients through its brokerage platform. Each contract resolves to one of two outcomes: a fixed cash payout if the stated condition is true at expiration, or zero if it is false. A buyer’s maximum loss is the premium paid for the contract; payoff and expiration terms are set by the contract specifications.

Cboe-listed binary options are expected to be cash-settled and centrally cleared. The firms have not released full contract specifications, listing dates or detailed eligibility rules. Those elements will determine settlement timing, strike-like conditions and the exact payout schedule. Schwab customers will likely need an options-enabled brokerage account that meets the firm’s requirements to trade the contracts.

Binary options provide single-event exposure rather than proportional gains or losses tied to the size of an index move. For example, a contract might state whether the S&P 500 will be at or above a specific level at a particular time on expiration day; traders buy the “yes” side if they expect the condition to occur and the “no” side if they expect it not to.

The products will operate under exchange rules and applicable securities regulations. Details on clearing arrangements, margining and account-level controls will be disclosed in formal product filings and broker notifications.

At the time of the announcement, Cboe and Charles Schwab had not provided launch timing, contract cadence, minimum sizes or investor eligibility details. Market participants and Schwab clients will need to review official term sheets and account disclosures once the full product documentation is published.