Federal securities regulators have given Nasdaq the go-ahead to launch a new type of investment product that works more like a casino bet than traditional stock trading.
The Securities and Exchange Commission approved Nasdaq’s request Thursday to offer binary options contracts tied to major stock market indexes, marking another step toward mainstream acceptance of prediction market investing.
These new financial instruments operate as simple yes-or-no wagers on whether stock indexes will finish above or below specific price points. Winners receive exactly $100 per contract, while losers get nothing.
Nasdaq MRX, the company’s electronic options platform, plans to initially offer these contracts based on the Nasdaq-100 index and its micro version. The Nasdaq-100 follows the performance of 100 major non-financial companies trading on the exchange, featuring tech giants like Apple, Nvidia and Intel. The micro version represents one-hundredth of the main index’s value.
The commission fast-tracked Nasdaq’s March application, determining the proposal met regulatory standards without raising fresh oversight issues.
“We welcome the SEC’s approval of Nasdaq MRX’s proposal to list and trade Outcome‑Related Options (OROs) tied to the Nasdaq-100 Index,” a company representative stated.
This approval reflects growing interest among financial companies in prediction markets, which allow participants to wager on real-world outcomes while potentially creating new profit opportunities and market intelligence.
Competitor Cboe Global Markets is also preparing to launch similar all-or-nothing contracts focused on financial and economic events, targeting a second-quarter rollout pending regulatory clearance.
