Key Takeaways
- Nasdaq submitted an SEC filing proposing binary options contracts linked to the Nasdaq-100 index, with pricing ranging from $0.01 to $1
- These “Outcome Related Options” replicate the functionality of prediction platforms such as Polymarket and Kalshi
- February saw Kalshi and Polymarket achieve combined trading volumes of $18.4 billion, marking their sixth consecutive monthly high
- Traditional exchanges like Cboe and CME are similarly pursuing prediction-based trading instruments
- SEC Chairman Paul Atkins highlighted prediction markets as a “huge issue,” noting jurisdictional questions between SEC and CFTC oversight
Nasdaq Pursues Binary Options Launch on Nasdaq-100 (NDX) While Crypto Exchanges Enter Prediction Trading Arena
Nasdaq has submitted a regulatory filing to the US Securities and Exchange Commission requesting authorization to launch binary options contracts linked to the Nasdaq-100 index.
Nasdaq MRX, an options trading venue operated by Nasdaq, submitted the application on Monday.
These instruments, designated as “Outcome Related Options,” feature pricing between $0.01 and $1 per contract. Winning positions settle at $1 while incorrect predictions expire without value.
The proposed offerings would track both the Nasdaq-100 Index and its Micro counterpart. Unlike many prediction platforms, these contracts would exclude non-financial events like sporting competitions or political races.
The structure bears striking similarity to prediction trading venues like Polymarket and Kalshi, which have experienced explosive expansion in recent trading periods.
Trading Volumes Reach Unprecedented Heights
Combined transaction volume between Kalshi and Polymarket climbed to $18.4 billion during February, establishing the sixth straight monthly peak. The previous record of slightly more than $17 billion was achieved in January.
Nasdaq plans to introduce these contracts across three separate trading venues it controls — Nasdaq NOM and Nasdaq PHLX in addition to MRX — each employing distinct fee structures that may compensate market makers.
Nasdaq MRX, the exchange named in the original submission, operates on a time-priority matching system without liquidity provision rewards.
Regulatory approval would classify these instruments as securities options under SEC jurisdiction. This designation would distinguish them from comparable event contracts that generally fall within Commodity Futures Trading Commission authority.
SEC Chairman Paul Atkins recently characterized prediction markets as a “huge issue,” emphasizing the unclear regulatory boundaries between SEC and CFTC supervision.
Traditional Exchanges Accelerate Innovation
Cboe Global Markets announced it’s examining the reintroduction of binary options products linked to financial indices.
CME Group continues expanding cryptocurrency derivative offerings and established a collaboration with FanDuel enabling wagering on non-financial outcomes.
Digital asset manager Bitwise submitted documentation last month proposing “PredictionShares” exchange-traded funds connected to the 2028 presidential election. GraniteShares and Roundhill filed comparable applications in February.
Cryptocurrency exchanges are joining the movement. Coinbase and Crypto.com are incorporating prediction trading capabilities into their service offerings.
The Intercontinental Exchange has either deployed capital into prediction markets or announced intentions to develop proprietary products.
Nasdaq’s application represents an effort to introduce fixed-payout, event-based trading mechanisms directly into traditional equity index options markets—a potential industry first.
The filing arrives during a period of heightened regulatory scrutiny. SEC Chair Atkins delivered his observations regarding the sector during recent public remarks this month.
