Key Takeaways
- Nasdaq submitted an SEC filing to launch binary contracts tied to the Nasdaq-100 index, with pricing ranging from $0.01 to $1
- These “Outcome Related Options” replicate the mechanics found on prediction platforms such as Polymarket and Kalshi
- Kalshi and Polymarket recorded $18.4 billion in combined trading volume during February, marking the sixth consecutive monthly high
- Competing exchanges like Cboe and CME are pursuing similar event-based trading products
- SEC Chair Paul Atkins identified prediction markets as a “huge issue,” highlighting jurisdictional questions between the SEC and CFTC
Nasdaq Seeks Approval for Binary Contracts on Nasdaq-100 While Crypto Prediction Platforms Experience Explosive Growth
Nasdaq has submitted an application to the US Securities and Exchange Commission for authorization to introduce binary options contracts linked to the Nasdaq-100 index.
Nasdaq MRX, one of the company’s options trading venues, submitted the application on Monday.
These instruments carry the designation “Outcome Related Options.” Pricing falls within a $0.01 to $1 range, with successful predictions paying out $1 while incorrect forecasts expire with zero value.
The proposed products reference both the Nasdaq-100 Index and the Nasdaq-100 Micro index. Coverage would remain limited to financial markets, excluding categories like sports or political events.
This framework closely resembles the operational model employed by prediction market operators like Polymarket and Kalshi, platforms that have experienced substantial expansion in recent periods.
Prediction Platform Trading Reaches New Peaks
Kalshi and Polymarket together processed $18.4 billion in trading volume during February, extending their streak of record-breaking months to six. The previous peak of slightly above $17 billion occurred in January.
Nasdaq plans to extend these contracts to two additional exchanges under its management — Nasdaq NOM and Nasdaq PHLX — where distinct pricing structures provide compensation to traders who contribute liquidity.
Nasdaq MRX, the venue for the original application, operates on a priority-based model without liquidity incentive programs.
Approval would classify these instruments as securities options under SEC jurisdiction. This designation creates a distinction from most existing event contracts, which generally operate under Commodity Futures Trading Commission authority.
SEC Chair Paul Atkins recently characterized prediction markets as a “huge issue,” noting the jurisdictional ambiguity between the SEC and CFTC in supervising these products.
Rival Exchanges Accelerate Development Plans
Cboe Global Markets announced plans to examine bringing back “all-or-nothing” binary options connected to financial indicators.
CME Group continues broadening crypto derivatives availability and established a partnership with FanDuel enabling wagers on markets beyond traditional finance.
Bitwise, a crypto asset management firm, submitted documents last month proposing “PredictionShares” ETFs linked to the 2028 US presidential election. GraniteShares and Roundhill followed with comparable applications in February.
Cryptocurrency exchanges are actively participating as well. Coinbase and Crypto.com are incorporating prediction market functionality into their existing platforms.
The Intercontinental Exchange has either allocated capital to the prediction market sector or announced intentions to develop proprietary products.
Nasdaq’s submission would introduce fixed-payout, event-based trading mechanisms directly into the listed equity index options marketplace for the first time.
The filing arrives during a period of heightened regulatory scrutiny. SEC Chair Atkins delivered his remarks concerning the industry earlier this month.
