Nasdaq Files Proposal for Binary Options on Technology Index

Original | Odaily Planet Daily (@OdailyChina)

Author | Asher (@Asher_0210)

Last night, Nasdaq, Inc. submitted a rule change proposal to the U.S. Securities and Exchange Commission (SEC) to introduce an options contract allowing investors to make “yes or no” bets on major stock indices.

Based on the document, Nasdaq plans to list "binary options," also known as "outcome-linked options," on its flagship products—the Nasdaq 100 Index and the Nasdaq 100 Micro Index. If approved, this would mark Nasdaq's first official introduction of a product with predictive market characteristics.

This move signifies that traditional securities exchange giants are actively entering the rapidly growing prediction market sector.

The proposed contract pricing range is $0.01 to $1, with the price directly reflecting the market's assessment of the probability of a particular outcome.

For example, if a contract is based on whether the Nasdaq 100 Index meets a certain condition at a specific point in time, then:

• If the market believes the probability of this outcome is 80%, the price may approach $0.80;
• If the conditions are met at expiration, the contract settles at $1;
• If the conditions are not met, the contract value becomes zero.

If traditional options are about betting on "how much it will rise or fall," binary options focus on "whether it will happen." With no complex parameters or range calculations—only the outcome itself—this all-or-nothing settlement makes trading feel more like making a clear prediction about the future.

For this reason, these products are more similar in form to prediction market logic.

Nasdaq did not select an ordinary index, but rather one of the most market-sentiment-sensitive assets. The Nasdaq 100 has long been regarded as the core indicator of the U.S. technology sector, with its components concentrated in heavyweight companies such as Apple, NVIDIA, Microsoft, Amazon, and Meta. These companies frequently become the focus of the market each quarter, where a single earnings report, a regulatory announcement, or even a policy statement can quickly reflect in the index’s movement.

The high concentration of components causes the Nasdaq 100 to often revolve around a single focal point. At times, the market may bet on AI expectations, then shift to interest rate trajectories or policy changes. During earnings or policy-heavy periods, the index typically reacts swiftly to market sentiment rather than undergoing prolonged back-and-forth movements.

In addition, the Nasdaq 100 itself has a well-established derivatives trading infrastructure, ample liquidity, and a robust pricing system. Launching new structured products on this underlying asset carries manageable risk and is more likely to gain market acceptance.

Nasdaq is not the first traditional exchange to express interest in prediction markets. In October 2025, Intercontinental Exchange, the parent company of the New York Stock Exchange, announced a strategic investment of approximately $2 billion in Polymarket, acquiring about a 20% stake, with the transaction valuing the company at around $8 billion.

The New York Stock Exchange’s approach is not to launch its own prediction products, but to enter the space through capital participation and data collaboration. Its core objective is to acquire real-time probability data generated by prediction markets and integrate it into its institutional services. For the NYSE, prediction markets serve more as a complementary sentiment indicator and data asset.

In contrast, Nasdaq’s approach is more direct: it has embedded the binary structure into its core index product line, extending within its existing trading framework. Compared to investing in external prediction market platforms, this approach integrates predictive trading into a standardized securities product system, rather than treating it as merely an external data source.

The difference between the two strategies reflects varying assessments by traditional exchanges when confronting new trading structures.

Regardless of whether the U.S. SEC ultimately approves this proposal, Nasdaq’s submission of this rule change application itself sends a clear signal: predictive trading is no longer just an experiment by crypto platforms or niche markets—it is beginning to be integrated into the product offerings of traditional exchanges.

For a long time, mainstream derivatives have revolved around price fluctuations, with investors using various structures to assess the magnitude and time window of price movements. Binary options simplify this by reducing the question to whether the outcome is valid, shifting the focus of trading from magnitude to the outcome itself.

Once the Nasdaq 100 Index is incorporated into this type of contract structure, the trading logic becomes more straightforward. The market no longer focuses on the magnitude of price movements, but rather on whether a specific outcome will materialize. The price reflects not just volatility, but consensus on the probability of the outcome.

For Nasdaq, this is an extension of its product line. For prediction markets, it marks the beginning of their structure being formally accepted by mainstream systems. If this product is ultimately launched, it could serve as an attempt to bridge traditional derivatives and event-based trading.