Cboe Launches Groundbreaking Prediction Market Framework, Introduces "Partial Payoff" Mechanism

March 9th — Cboe Global Markets today announced the launch of an innovative prediction market product framework that moves beyond the “yes/no, all-or-nothing” constraints of traditional binary event contracts, adding a “partial return range” mechanism. Under the new framework, contracts will offer three potential outcomes: $0, a partial return within a specified range, or a full $100 payout. The first product under the framework is slated to launch in the second quarter of 2026: a mini S&P 500 Index prediction contract. This contract will let traders express views on the daily closing level of the U.S. stock market, allowing them to take traditional “yes/no” positions or leverage the new “return range” positions to earn partial returns when their directional view is correct—no need to hit the exact target. JJ Kinahan, Cboe’s Head of Retail Expansion and Alternative Investment Products, noted: “Real-world perspectives aren’t always binary opposites. Our more nuanced model is designed to reward informed judgment—even if traders are only roughly right, they can still earn returns.” The product will be structured as a traditional option, settled in cash, listed on the Cboe Options Exchange, and cleared by the Options Clearing Corporation (OCC). Pricing will be tied to the world’s deepest, most liquid SPX options market, enabling customers to benefit from the transparency, liquidity, and safeguards of regulated securities markets. Cboe may expand this framework to additional indices or individual stocks in the future.