Last October JJ Kinahan joined Cboe Global Markets as head of retail expansion and alternative investment products. On 23 June 2026 Cboe said in a statement that it was launching the first products in Cboe Predicts, its new prediction markets suite, with the aim of introducing retail traders to the options market.

Kinahan told Markets Media that the new contracts are aimed at retail traders who use prediction markets but have not traded options.

“I don’t think anybody else has tried to take the popularity of prediction markets and lead retail to something that they can do at a higher level,” he added. “We are trying to Hansel and Gretel people by laying out breadcrumbs.”

The first product in Cboe’s new suite is a Mini S&P 500 Index prediction market contract. Under Cboe’s new proprietary and patent-pending framework, customers can participate in contracts that deliver three potential payout outcomes: a $0 payout, a partial payout within a defined “payout zone,” or a full $100 payout.  Investors can express their outlook on the price of the U.S. equity market by taking a traditional “yes” or “no” position, or by using the “payout zone” to reduce potential losses and benefit from being directionally correct without needing to make a perfect call.

The prediction market contracts are security options and trade in the same regulatory framework as U.S.-listed options, providing institutional-grade liquidity, transparency, and surveillance.

Kinahan described the new prediction market contracts as using the mechanics of a traditional vertical spread, one of the most popular options strategies, and packaging them in an intuitive, accessible format for a broader audience. A vertical spread involves buying and selling options of the same type and expiry date but at different strike prices. He continued that Cboe’s more nuanced model with a payout zone, which rewards retail investors when they are mostly right, introduces a new way for people to engage with outcome-based trading that does not currently exist.

“We are doing something unique in trying to create longer-term market participants, and that is really good for the ecosystem,” Kinahan added.

The new contracts are initially available on retail broker Interactive Brokers and are expected to roll out at Charles Schwab and other retail platforms over time. The rollout to retail brokers was slightly delayed due to U.S. regulators overhauling the pattern day trading (PDT) rules, which restricted how retail could trade, and the huge retail interest in the initial public offering of SpaceX, Elon Musk’s rocket and artificial intelligence company.

Milan Galik, chief executive of Interactive Brokers, said in a statement that investors increasingly seek products that allow them to express a specific view on future events and market outcomes. Galik said: “Cboe’s binary options and Mini-S&P 500 Index contracts provide another way to do that, and we are pleased to make them available to Interactive Brokers clients.”

Kinahan agreed that when retail investors first get started, they typically want to express an opinion about prices moving up or down, but the options with payout zones allow them to do so in a risk-defined way.

“We are going to surround it with education,” Kinahan added. “We tell retail brokers that we are creating more traders who have an opportunity to engage with the markets for a lifetime, not just with a yes or no.”

He highlighted that prediction market traders are typically younger and options give them an opportunity to add longer-term returns. In addition, he argued that prediction markets are based on probabilities, and so are option contracts.

“Prediction markets have been a great area of growth,” said Kinahan. “I think future growth is going to come from helping people understand that there’s more to the world than ‘yes or no’ and helping them to become options traders.”

In 2025, vertical spread trades averaged nearly 580,000 contracts per day in zero days to expiry (0DTE) SPX options, according to Cboe, which the firm said shows clear customer demand to trade around market events tied to the S&P 500 Index.

Rob Hocking, global head of derivatives at Cboe, said in a statement that the exchange prediction contracts are differentiated from other SPX event contracts because they are built directly on top of the SPX options ecosystem.

“This means that pricing is grounded in real market activity, and customers can benefit from the transparency, liquidity and safeguards of our regulated securities exchange,” said Hocking.

New products

Kinahan leads Cboe’s newly established business to develop alternative investment products for retail customers, helps to oversee product strategy, regulatory alignment, and go-to-market execution for offerings including event-based trading, prediction markets, crypto derivatives, and tokenized instruments. Kinahan was previously chief executive of IG US Holdings, the parent company of tastytrade, the retail brokerage and trading platform.

Craig Donohue, chief executive of Cboe, said in a statement when Kinahan was hired: “The addition of JJ Kinahan, a highly regarded industry veteran in the retail brokerage space with deep expertise in equity derivatives, will further position Cboe to capitalize on emerging opportunities in the retail oriented digital, crypto, and event markets space.”

On Cboe’s first quarter results call Donohue said the broader payout zone in the prediction contracts was being well received by the retail brokerage community and the launch is the first step in the group’s broader event contract strategy. He believes Cboe’s move into event and prediction markets will bring capabilities and enhancements designed to address many of the weaknesses in the current event and prediction market space.

“We see significant growth ahead as these products become increasingly integrated into the financial markets, and we intend to expand beyond index-based outcomes by leveraging our capabilities across both securities and futures,” added Donohue. “Longer term, we see a compelling opportunity to introduce additional contracts around economic and financial indicators.”

Donohue argued that Cboe is particularly strong in equity and equity derivatives, so the group is “super keen” on coming to market with company-specific contracts.

“We see lots of opportunities for doing that,” said Donohue. “Rob and his team and J.J. Kinahan are working really closely with all of our partners, our liquidity providers, our market makers, our retail brokers to try to kind of move us to that next phase of growth.”

Over the long term, Donohue sees an opportunity to expand into CFTC regulated futures or swaps that are also event contracts.

It is likely that Cboe will follow up the new contracts with options on other indices, including the Dow Jones, mini-Russell and also VIX, Cboe’s proprietary measure of future U.S. stock market volatility, according to Kinahan. He added: “We continue to look at other opportunities via tokenization. Perpetual futures are becoming popular, so obviously we’re taking a look at those.”