Cboe Revives “All-or-Nothing” Binary Options to Challenge Prediction Market: WSJ

Core Viewpoint - Cboe Global Markets is considering reintroducing all-or-nothing binary options for retail investors to compete with the growing prediction markets [1][3] Group 1: Cboe's Strategy and Market Context - Cboe is in preliminary discussions with retail brokerages to renew fixed-return options contracts, allowing investors to make simple yes-or-no trades on financial performance [1][3] - The exchange is negotiating with market makers to provide liquidity for these products [2] - Cboe aims to focus on financial markets rather than broader event betting, intending to introduce simpler, event-based contracts to attract retail investors [6] Group 2: Market Trends and Historical Context - The renewed interest in binary options is driven by the rising popularity of prediction markets, which have seen significant trading activity [4][5] - Platforms like Kalshi and Polymarket reported over $17 billion in trading volume in January, marking the highest monthly volume in history and the fifth consecutive month of rising activity [5] - Cboe previously launched binary options in 2008 but faced limited adoption due to a market dominated by institutional traders; however, retail participation in derivatives has surged since the COVID-19 market rebound [7]