Nasdaq Announces Launch of Binary Options on Its Flagship Indices

Exchange operator Nasdaq plans to expand its product lineup with predictive instruments. According to Bloomberg, the company has submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC).

The proposal concerns the listing of binary options on the flagship Nasdaq 100 index and its micro version.

Mechanics of Outcome-Based Trading

The new instruments are called Outcome Related Options. In essence, they represent a simplified version of a traditional option, where a trader answers “yes” or “no” to a specific question about market movement.

According to the filing, contract prices will range from $0.01 to $1. The price of each lot directly reflects the market’s perceived probability that the event will occur.

Nasdaq has not stated that it intends to take market share from platforms such as Kalshi and Polymarket. Event-driven contracts have long been popular in over-the-counter trading between banks and large funds, and now retail traders will gain access to them through a regulated exchange.

Regulatory Race

The prediction markets industry is currently experiencing a boom, offering wagers on everything from sports outcomes to election results and pop culture events.

Nasdaq is joining a group of major players rushing to secure their niches.

For example, Cboe Global Markets is preparing event contracts tied to business activity, while CME Group, in partnership with FanDuel, is developing a mobile prediction app.

However, there is a key distinction. While platforms like Kalshi and Polymarket fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), Nasdaq’s binary options will be overseen by the SEC. This makes them a more familiar instrument for traditional brokers and institutional clients.

The primary underlying asset for the new options will be the Nasdaq 100, which includes shares of the 100 largest companies listed on the exchange, including Nvidia and Apple.

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