Nasdaq is proposing to list binary options tied to its flagship stock indexes, including the Nasdaq-100. This move would allow traders to place yes-or-no bets on the direction of major equity benchmarks. The exchange filed a proposal with the U.S. Securities and Exchange Commission (SEC) to offer these binary options on the Nasdaq-100 and the Nasdaq-100 Micro Index.
A binary option offers two possible outcomes: the condition is met, resulting in a profit, or the option expires worthless. Nasdaq's proposed contracts would be priced between $0.01 and $1, reflecting the market's perceived probability of a specific outcome.
If approved, these products will function similarly to contracts on prediction market platforms like Polymarket and Kalshi, offering traders a new method to express short-term views on closely watched stock indexes. This filing signifies Nasdaq's entry into a rapidly expanding segment of derivatives markets that merges traditional finance with prediction platforms. Rival exchange Cboe has also announced plans to expand into prediction markets amid surging interest in event-based trading.
This trend follows the rapid growth of platforms such as Polymarket and Kalshi, which facilitate trading on the outcomes of various events, from elections to economic data. While these platforms are regulated by the Commodity Futures Trading Commission (CFTC) for event contracts, binary options fall under the SEC's jurisdiction. Nasdaq's proposal highlights how established exchanges are adapting the prediction-style format for regulated securities markets.