The New York Stock Exchange is preparing to launch binary return options that will allow investors to make all-or-nothing bets on whether stocks and exchange traded funds finish above or below set prices. According to reports from The Economic Times, the binary return options are expected to begin trading within days, initially covering 12 underlying securities including Apple, Nvidia, Tesla and the SPDR S&P 500 ETF Trust. More securities are expected to be added over time.
Unlike traditional options, the new contracts are designed around a simple outcome, paying $1 or nothing at expiration depending on whether the underlying security finishes above or below the contract's strike level. As reported by The Economic Times, Kevin Tyrrell, chief product officer at NYSE, noted that the exchange has seen incredible growth in the US options market over the last several years, with significant interest in newer ways to trade. The contracts are cash settled, European style, and can only be exercised at expiration.
The exchange is also seeking approval for binary KPI options linked to company earnings metrics, expanding the range of event-driven trading products available to investors. According to The Economic Times, these contracts would pay investors based on whether a company reports a specified result above or below a set threshold. The contracts could cover metrics including net sales, earnings per share, cloud computing revenue and vehicle production. The cash settled, European style contracts could only be exercised at expiration, with investors receiving either $1 or nothing depending on the reported result.
The broader prediction market industry is experiencing significant growth, with S&P Dow Jones Indices recently partnering with Kalshi to create stock index event contracts and explore new benchmarks built from prediction market data. As reported by The Economic Times, the October 26 agreement gives Kalshi preferred platform status for contracts tied to S&P DJI indices, including the S&P 500. Through this arrangement, S&P DJI also becomes a preferred provider for creating indices using Kalshi's market data, with potential products tracking expectations surrounding economic indicators, political developments and sports.
The prediction market sector is attracting substantial institutional investment, with Intercontinental Exchange announcing an investment of up to $2 billion in Polymarket in October 2025, following an initial $1 billion investment and another $600 million in March 2026. Nasdaq has also moved into event-based financial contracts, applying for CFTC approval on October 26 to operate a derivatives exchange initially offering binary contracts tied to inflation. This represents a wider push by exchanges to capture demand for event-driven trading, with companies like Cboe Global Markets and Robinhood also receiving approval for similar products.
