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), planning to introduce an options contract that allows investors to make "yes or no" judgments on major stock indices.
According to the document, Nasdaq intends to list "binary options," also known as "outcome-related options," on its flagship products—the Nasdaq 100 Index and the Nasdaq 100 Micro Index. If approved, this would mark Nasdaq's first official foray into products with prediction market attributes.
This move signifies that traditional stock exchange giants are actively entering the rapidly growing prediction market sector.
What Are Binary Options?
The proposed contracts have a pricing range of 1 cent to 1 dollar, with the price itself directly reflecting the market's judgment of the probability of a specific outcome.
For example, if a contract is based on whether "the Nasdaq 100 Index meets a certain condition at a specific time point," then:
- If the market believes the probability of this outcome is 80%, the price might be close to $0.80;
- If the condition is met at expiration, the contract settles at $1;
- If the condition is not met, the contract value becomes zero.
If traditional options are about betting on "how much it will rise or fall," binary options are more concerned with "whether it will happen." There are no complex parameters, no interval calculations—only the outcome itself. This all-or-nothing settlement method makes trading more like making a clear judgment about the future.
Because of this, such products are closer in form to the logic of prediction markets.
Why Choose the Nasdaq 100?
Nasdaq's choice is not an ordinary index but one of the most sentiment-sensitive assets. The Nasdaq 100 has long been regarded as a core indicator of the U.S. technology sector, with concentrated holdings in heavyweight companies like Apple, NVIDIA, Microsoft, Amazon, and Meta. These companies almost always become market focal points each quarter. An earnings report, a regulatory update, or even a policy statement can quickly reflect in the index's movement.
The high concentration of components means that the Nasdaq 100's trends often revolve around a single focus. The market might bet on AI expectations for a period, then shift to interest rate paths or policy changes. During earnings or policy-intensive periods, the index typically reflects market judgments in a relatively short time rather than prolonged back-and-forth fluctuations.
Additionally, the Nasdaq 100 itself has a mature derivatives trading foundation, ample liquidity, and a well-established pricing system. Introducing new structured products on this underlying asset is risk-controllable and more likely to gain market acceptance.
Two Ways Traditional Exchanges Are Entering the Market
Nasdaq is not the first traditional exchange to show 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 valuation once reaching around $8 billion.
The NYSE's choice was not to launch its own prediction products but to enter the field through capital participation and data cooperation. Its core intention is to obtain real-time probability data formed by prediction markets and incorporate it into institutional service systems. For the NYSE, prediction markets are more like supplementary sentiment indicators and data assets.
In contrast, Nasdaq's approach is more direct. It chooses to embed binary structures into its core index product line, extending within the existing trading framework. Compared to investing in external prediction market platforms, this method means predictive trading is incorporated into the standardized securities product system, rather than being just an external data source.
The difference in strategies reflects the varying judgments of traditional exchanges when facing new trading structures.
Prediction Markets Are Being Integrated into Traditional Exchange Product Systems
Regardless of whether the SEC ultimately approves this proposal, Nasdaq's submission of the rule change application itself sends a clear signal—predictive trading is no longer just an experiment on crypto platforms or niche markets but is beginning to be integrated into traditional exchange product systems.
For a long time, mainstream derivatives have revolved around price fluctuations, with investors judging the magnitude and timing of rises and falls through different structures. Binary options simplify the question to whether the outcome will occur, shifting the trading focus from magnitude to the conclusion itself.
When the Nasdaq 100 Index is incorporated into such contract structures, the trading logic becomes more direct. The market's focus is no longer on the magnitude of fluctuations but on whether a specific outcome will materialize. The price reflects not just volatility but the consensus on the probability of the outcome.
For Nasdaq, this is an extension of its product line. For prediction market, it is the beginning of its structure being formally accepted by the mainstream system. If this product eventually launches, it could become a bridging attempt between traditional derivatives and event-based trading.
