To older hands, the latest product developments in the markets have a sense of Deja vu about them.
Perpetual crypto contracts, which are heralded as the greatest innovation in trading, look and sound just like CFDs, which can trace their roots back to London in the late 1980s and which became extremely popular in the UK in the 90s and 2000s.
However, it is in the prediction markets that we can find an even bigger corollary, because though they might not like to admit it, the prediction market exchanges are peddling binary options.
Another product that rose to prominence in London in the 2000s, only for it to be abused by overeager marketing departments and unregulated cowboys.
The latest US broker to jump on the prediction market bandwagon is Charles Schwab SHWB US, which is said to be working with the CBOE to create what it calls a yes or no options product, initially on the S&P 500.
The product will offer fixed cash payouts if an event occurs. For example, if the index closed at or above a certain level, or finished down on the day. “Chuck”, as the brokerage is fondly referred to, is aiming to introduce the product later this year.
Schwab will be following in the footsteps of its rivals Robinhood HOOD US. Which launched prediction markets last year, and who have been working with Susquehanna to build a CFTC-licensed exchange for event contracts.
This new exchange, to be known as Rothera, is coming on stream in June 2026.
The commission-free brokerage reported that it traded 12.0 billion event contracts in 2025, and by mid-February 2026, it had turned over a further 4.0 billion.
Vlad Tenev, CEO of Robinhood, was quoted as saying that prediction markets “could drive trillions in annual volumes,” adding that they were the firm’s fastest-growing business.
Tenev’s claims might sound outlandish, but Kalshi, one of the two major players in US prediction markets, confirmed earlier in the year that it had reached a $1.0 billion in daily turnover.
Israeli-based plus500 PLUS LN launched a prediction markets joint venture in the US, with Kalshi, back in February. And rival Broker eToro ETOR US recently acquired ZENGO, a keyless wallet and custodian app that will allow eToro to push into prediction markets. The firm has also been working with Polymarket, Kalshi’s main rival.
The World Cup and the US midterm elections will provide plenty of event opportunities for traders looking to speculate, away from both TradFi and Crypto markets.
The only question is whether regulation in the US can adapt quickly enough to prevent the same kind of abuses that killed the binary options market in the UK and Europe.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
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