Cboe Global Markets said on Monday it intends to roll out prediction market contracts that provide partial payouts tied to the precision of participants' predictions, moving away from the conventional binary payoff model.
The planned product aims to give investors compensation that scales with how accurate their forecasts are rather than limiting outcomes to a simple win-or-lose result. Cboe framed the structure as analogous to features already available in some wagering applications, where users can exit positions early while events are unfolding. The exchange also cited inspiration from traditional options market constructs such as the vertical spread.
"Real-world opinions aren’t always binary, and investors shouldn’t be confined to a yes-or-no framework," said JJ Kinahan, Head of retail expansion and alternative investment products at Cboe.
Cboe plans to introduce the new payout framework through a Mini S&P 500 Index prediction market contract. The move follows the exchange's prior exploration of a different regulated product that would employ an options-based structure to deliver all-or-none payouts.
The initiative comes as several major U.S. exchange operators pursue opportunities in event-based prediction markets. The space gained heightened visibility during the 2024 U.S. presidential race, and exchanges are responding with their own products and investments.
Nasdaq has applied for SEC approval to offer prediction market-style options tied to major stock indexes. Separately, Intercontinental Exchange has committed up to $2 billion in funding to Polymarket, another participant in the prediction market ecosystem.
The article also noted Nasdaq's listing ticker in connection with investor interest. A technology referenced in industry commentary, ProPicks AI, is described as evaluating Nasdaq (NDAQ) alongside many other companies each month using a large set of financial metrics; the material cites past highlighted winners such as Super Micro Computer (+185%) and AppLovin (+157%).
As exchanges design and test new structures, the sector is experimenting with ways to make prediction markets appeal to a broader audience by offering payoffs that reflect varying degrees of forecast accuracy rather than a single binary outcome.