The Nasdaq stock exchange has filed a formal request with federal regulators to launch binary options trading on its flagship stock indexes, according to regulatory documents filed on March 2nd. The exchange is specifically asking the Securities and Exchange Commission for permission to offer binary options on both the Nasdaq-100 index and its Nasdaq-100 Micro Index. The Nasdaq-100 serves as a benchmark that follows the performance of the 100 largest non-financial corporations trading on the Nasdaq exchange, including technology giants such as Apple, Nvidia and Intel. The micro version represents one one-hundredth of the full index's value, allowing traders to place yes-or-no bets on whether the index will reach certain price levels within specified time periods.
As reported by CoinDesk and PANews, Nasdaq's proposed binary options would function similarly to contracts on prediction market platforms such as Polymarket and Kalshi, giving traders a new way to express short-term views on the performance of one of the market's most closely watched stock indexes. The filing marks Nasdaq's entry into a fast-growing corner of derivatives markets that blends traditional finance with the mechanics of prediction platforms. Binary options are a simplified version of options contracts where payouts depend on the outcome of a 'yes or no' proposition, allowing traders to take binary positions on whether a specific event occurs. Binary options fall under the SEC's jurisdiction, while platforms like Polymarket and Kalshi are regulated by the Commodity Futures Trading Commission (CFTC) because they offer event contracts tied to real-world outcomes. The contracts are currently awaiting SEC approval.
According to CoinDesk reports, the move highlights how traditional exchanges and crypto platforms alike are adapting prediction-style trading formats within U.S. securities and derivatives regulations amid growing interest in event-based markets. Rival exchange Cboe also announced plans to expand into the prediction markets business as interest in event-based trading has surged. The push follows the rapid growth of platforms such as Polymarket and Kalshi, which allow users to trade on the outcomes of events ranging from elections to economic data releases. Financial contracts listed in the prediction market industry cover sports, politics, and popular culture, demonstrating the expanding scope of these markets. Nasdaq's new prediction market could attract algorithmic trading activity while cybersecurity stocks continue to be scrutinized for fundamentals, with the market watching whether this initiative increases participation in index-based products.
As reported by CoinDesk, crypto exchanges have also moved quickly to capitalize on the prediction market trend. Coinbase recently rolled out prediction markets on its platform, giving digital asset traders access to contracts linked to political, economic and cultural events. Gemini received CFTC approval in December to operate as a Designated Contract Market (DCM), allowing the firm to offer regulated prediction markets to U.S. customers. This regulatory adaptation demonstrates how established exchanges are seeking to adapt the prediction-style format to regulated securities markets, with Nasdaq's entry representing the latest development in this growing sector. The exchange has not yet disclosed implementation timelines for the new binary options product.