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Charles Schwab is preparing to enter the prediction markets sector through a partnership with Cboe Global Markets, according to a Wall Street Journal report.

The companies are developing options-based contracts that would let customers make yes-or-no wagers on the performance of the S&P 500. Unlike prediction market platforms such as Polymarket and Kalshi, which typically offer futures-style contracts, Schwab's products would function as options that pay a fixed cash amount or nothing at all depending on whether the index closes above or below a target level.

Schwab and Cboe are also planning a related offering using Cboe's "Plus Zone" feature, which would provide traders with a partial payout when their prediction is close to the final market outcome, even if the index does not finish exactly at the target price.

The products are expected to launch in the coming months.