Nasdaq Seeks SEC Approval for Binary Options on Nasdaq 100 Index

Nasdaq Inc. has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to list binary options contracts tied to its flagship Nasdaq 100 Index and the Nasdaq 100 Micro Index, allowing traders to place yes-or-no bets on index performance.

The proposed “Outcome Related Options” would be priced between $0.01 and $1, reflecting market probability that a specified condition will be met, and mark the exchange operator’s first entry into products that mirror prediction market mechanics under SEC jurisdiction.

What Are Nasdaq’s Proposed Binary Options?

The proposed contracts are binary options, a simplified derivative structure where payout depends entirely on whether a yes-or-no proposition resolves as true. If the specified condition occurs, the option pays a fixed amount; if not, it expires worthless. The contracts would be listed on the Nasdaq 100 Index, which tracks the 100 largest companies trading on Nasdaq’s exchange including Nvidia Corp. and Apple Inc., and the micro-sized version of the index.

Nasdaq’s filing describes the products as offering traders a new way to express short-term views on one of the most widely followed equity benchmarks, with pricing between one cent and one dollar reflecting the market’s consensus probability of an outcome occurring.

How Do These Differ From Existing Prediction Markets?

The proposal places Nasdaq’s entry in the prediction market space under SEC oversight, distinguishing it from competing platforms regulated by the Commodity Futures Trading Commission (CFTC). Rival platforms including Kalshi, Polymarket, and Crypto.com operate as CFTC-regulated Designated Contract Markets (DCMs) offering event contracts tied to real-world outcomes such as elections, economic data releases, and cultural events.

Binary options have historically been regulated by the SEC as securities products, while event contracts on prediction platforms fall under CFTC jurisdiction. The regulatory distinction has become a focal point as traditional exchanges and crypto platforms alike adapt prediction-style trading formats.

What Is Nasdaq’s Regulatory Path?

The proposed rule change is pending SEC approval, with no specified timeline for a decision. The filing initiates a public comment period and review process by the commission, which under Chair Paul Atkins has signaled openness to evaluating where prediction markets fall within existing regulatory frameworks.

Atkins has previously stated that some prediction markets could involve overlapping jurisdiction between the SEC and CFTC, describing the issue as a “huge issue” the agency is focused on.

Who Are Nasdaq’s Competitors in This Space?

Nasdaq joins a growing list of traditional exchange operators and financial firms moving into prediction-style products:

• Cboe Global Markets Inc. is planning to launch event contracts focused on business and market events, with discussions underway with brokers for yes-or-no contract offerings.

• CME Group Inc. has partnered with FanDuel, the online sports-gambling division of Flutter Entertainment Plc, to develop a prediction market-focused consumer application.

• Intercontinental Exchange Inc. , owner of the New York Stock Exchange, invested up to $2 billion in Polymarket in October 2025, valuing the prediction platform at $9 billion.

• Coinbase recently introduced prediction markets on its platform, giving digital asset traders access to event-based contracts.

• Gemini received CFTC approval in December 2025 to operate as a Designated Contract Market, enabling regulated prediction market offerings to U.S. customers.

What Is the Market Context?

The Nasdaq 100 index options complex is already among the most actively traded in the world, with daily-expiring options accounting for the majority of trading volume. Binary options would add a complementary instrument for traders seeking simplified exposure to index movements.

Prediction markets have generated billions in weekly trading volume over the past year, driving interest from both traditional finance and crypto sectors in event-based trading products. Nasdaq’s filing represents the first attempt by a major U.S. stock exchange operator to bring binary options tied to a broad equity index under SEC oversight, potentially expanding the addressable market for prediction-style instruments.

Frequently Asked Questions

1. How do Nasdaq’s proposed binary options work?

The contracts would allow traders to take a yes-or-no position on whether the Nasdaq 100 Index or Nasdaq 100 Micro Index meets a specified condition. Options are priced between $0.01 and $1 based on market probability. If the condition occurs at expiration, the buyer receives a fixed payout; if not, the option expires worthless.

2. What is the regulatory difference between Nasdaq’s proposal and platforms like Polymarket?

Nasdaq’s binary options would be regulated by the SEC as securities products. Platforms like Polymarket and Kalshi operate under CFTC oversight as Designated Contract Markets offering event contracts. The jurisdictional split reflects differing statutory frameworks: binary options fall under securities laws, while event contracts are typically structured as derivatives subject to CFTC authority.

3. When would Nasdaq’s binary options launch if approved?

There is no set timeline. The SEC must review the proposed rule change, publish it for public comment, and issue an approval or disapproval order. The process can take several months depending on commission priorities and whether questions or modifications are raised during review.