Original article | Odaily Odaily( @OdailyChina )
Author | Asher ( @Asher_0210 )
Last night, Nasdaq submitted a rule change proposal to the U.S. Securities and Exchange Commission (SEC), planning to introduce an options contract that would allow investors to make "yes or no" judgments on major stock indices.
According to the documents, Nasdaq plans to list "binary options," also known as "outcome-related options," on its flagship products—the Nasdaq 100 Index and the Nasdaq 100 Mini Index. If approved, this will be Nasdaq's first official launch of a product with predictive market characteristics.
This move signifies that traditional stock exchange giants are proactively entering the rapidly growing prediction market sector.
What are binary options?
The proposed contract will be priced between 1 cent and 1 dollar, with the price directly reflecting the market's assessment of the probability of a particular outcome.
For example, if a contract revolves around whether the Nasdaq 100 index meets a certain condition at a specific point in time, then:
- If the market believes there is an 80% probability of this outcome, the price could be close to $0.80.
- If the conditions are met upon expiration, the contract will settle at $1.
- If the conditions are not met, the contract value becomes zero.
If traditional options are about betting on "how much the price will rise or fall," then binary options are more concerned with "whether it will happen." There are no complex parameters, no range calculations, only the outcome itself. This all-or-nothing settlement method makes trading more like making a definitive judgment about the future.
For this reason, these products are closer in form to the logic of predictive markets.
Why choose Nasdaq 100?
Nasdaq doesn't choose an ordinary index, but rather one of the most market-sensitive assets. The Nasdaq 100 has long been considered a core indicator of the US technology sector, with its constituent stocks concentrated in heavyweight companies such as Apple, Nvidia, Microsoft, Amazon, and Meta. These companies become the focus of the market almost every quarter; an earnings report, a regulatory announcement, or even a policy statement can quickly be reflected in the index's movement.
The highly concentrated composition of the Nasdaq 100 index means that its movements often revolve around a single focus. At one point, the market might bet on AI expectations, then shift its focus to interest rate paths or policy changes. During peak earnings seasons or periods of concentrated policy activity, the index typically reflects market sentiment in a short period rather than undergoing prolonged, back-and-forth fluctuations.
Furthermore, the Nasdaq 100 itself possesses a mature derivatives trading foundation, ample liquidity, and a well-established pricing system. Launching new structured products on this index carries manageable risk and is more likely to gain market acceptance.
Two ways for traditional exchanges to enter the market
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 a stake of about 20%, valuing the company at around $8 billion at one point.
The NYSE's choice is not to launch its own prediction products, but rather to enter this field through capital participation and data collaboration. Its core intention is to acquire real-time probability data from prediction markets and integrate it into its institutional service system. For the NYSE, prediction markets are more like a supplementary sentiment indicator and data asset.
In contrast, Nasdaq's approach is more direct. It chose to embed the binary structure into its core index product line, extending its existing trading framework. Compared to investing in external prediction market platforms, this approach means that predictive trading is incorporated into the standardized securities product system, rather than simply being an external data source.
The difference between the two strategies reflects the different judgments of traditional exchanges when faced with new trading structures.
Prediction markets are beginning to be incorporated into the product portfolios of traditional exchanges.
Regardless of whether the U.S. SEC ultimately approves the proposal, Nasdaq's submission of the rule change application itself has sent a clear signal— predictive trading is no longer just an experiment for crypto platforms or niche markets, but is beginning to be incorporated into the product systems of traditional exchanges.
For a long time, mainstream derivatives have revolved around price fluctuations, with investors using different structures to judge the magnitude and time window of price increases or decreases. Binary options, however, simplify the problem to whether the outcome is true, shifting the focus of trading from the magnitude to the conclusion itself.
When the Nasdaq 100 index was included in this type of contract structure, the trading logic became more straightforward. The market no longer focused on the magnitude of price fluctuations, but rather on whether a certain outcome could be achieved. The price reflected not just volatility, but a consensus on the probability of that outcome.
For Nasdaq, this represents an extension of its product line. For prediction markets, it marks the beginning of their structure being formally accepted by the mainstream system. If the product is ultimately launched, it could become an attempt to bridge the gap between traditional derivatives and event-driven trading.
