The exchange’s Nasdaq 100 “yes-or-no” contracts would be listed as securities, not derivatives — potentially redefining how federal regulators divide oversight of prediction markets.
First, Dow Jones partners with Polymarket. Now, Nasdaq is getting in on the prediction market boom.
Nasdaq Inc. plans to roll out options contracts that would allow yes-or-no bets on a major stock index, as first reported by Bloomberg. Through its subsidiary Nasdaq MRX, the exchange operator filed a proposed rule change with the US Securities and Exchange Commission to introduce “Outcome Related Options.”
How Nasdaq MRX binary options would work
According to the filing, Nasdaq wants to “list binary options on its flagship Nasdaq 100 Index and the Nasdaq 100 Micro Index.” The contracts “would be priced between 1 cent and $1, reflecting the market’s view of an outcome becoming true.”
The contracts would allow traders to take a “yes-or-no” position on whether a specific index-related event occurs. Essentially, customers would be allowed to predict the outcome of stocks’ performances — for example, trading on whether or not NVIDIA closes the week above $200.
The Nasdaq 100 tracks the 100 largest non-financial companies listed on the exchange, like Apple and NVIDIA. The micro index is based on 1/100th of the full value of the Nasdaq 100, per Reuters.
Nasdaq’s market will enter a crowded pool: Cboe is reportedly eyeing a second-quarter launch for its own “all-or-nothing” contracts, also tied to financial benchmarks.
SEC vs. CFTC incoming?
What makes this Nasdaq filing interesting is that Nasdaq consulted the SEC, not the Commodities Futures Trading Commission (CFTC), which has been the primary regulatory body overseeing the rise of prediction markets. If approved, these Nasdaq prediction contracts would be listed as securities under SEC oversight, not derivatives that the CFTC regulates.
The SEC is also making a move into the prediction market space. Speaking before the Senate Banking Committee in February, SEC chair Paul Atkins called prediction markets “a huge issue” for federal regulators, citing potential overlap between the two agencies.
“Prediction markets are exactly one thing where there’s overlapping jurisdiction potentially,” Atkins said, in response to a question from Sen. Dave McCormick (R-PA). “It’s mostly, at least currently, on the CFTC side. But we need to be harmonized in the way we’re addressing these markets. I think we have enough authority. A security is a security regardless of how it is, and some of the nuance with prediction markets and the products depends on wording and what exactly is being done.”
For his part, CFTC chair Michael Selig laid out clearly why the two regulators aren’t as redundant as they might appear. During a Feb. 12 appearance on Bloomberg’s Odd Lots podcast, Selig drew a sharp distinction between the two agencies’ core purposes.
“The CFTC and SEC are very different regulators,” Selig said. “The SEC is a capital markets regulator. They are focused on [if] somebody wants to raise capital for a great idea; other people want to place that capital somewhere. There needs to be some regulation over that.”
The SEC was created after the Great Depression to help tamp down the “chaos in the markets,” Selig added, while the CFTC’s mandate is fundamentally different — focused on risk mitigation and allowing businesses to hedge against inputs and operational exposure, with other participants supplying liquidity into those markets.
“So, very different purpose for the regulator,” he said. “There’s not the same sort of disclosure regime that we have at the SEC. And so, it makes sense to have two separate regulators.” Still, Selig stressed that coordination — not consolidation — is the goal: “Chairman Atkins and I have been very clear on the lack of coordination between the agencies. We need to harmonize the two regimes to make sure there are no inconsistent and incompatible rules.”
A test of SEC and CFTC coordination efforts
Nasdaq’s binary options filing lands squarely in the middle of that unresolved tension. Unlike event contracts on Kalshi or Polymarket — which operate under CFTC oversight as designated contract markets — Nasdaq’s proposed contracts would sit inside the SEC’s securities framework, with the full disclosure regime and exchange infrastructure that comes with it.
Whether that’s a feature or a complication for the regulators trying to draw clean lines may end up being the more consequential question than whether the product itself succeeds. If approved, it would be the first real test case of what “coordination, not consolidation” actually looks like in practice.
