Discussions surrounding prediction markets are rapidly gaining traction, with major traditional exchanges considering integrating and launching related features. Nasdaq reportedly filed an application with the U.S. Securities and Exchange Commission (SEC) today, proposing to launch binary options products linked to its Nasdaq 100 index. This not only signifies its formal entry into the prediction market but may also trigger discussions regarding regulatory responsibilities between the SEC and the CFTC.
Nasdaq files for "outcome option product," venturing into the prediction market.
Bloomberg reports that Nasdaq has filed a rule change application with the U.S. Securities and Exchange Commission (SEC) to launch a new type of contract called "Outcome Related Options." According to the application, the product will be linked to the Nasdaq 100 index and its mini-version, and will employ a binary settlement mechanism.
The specific structure is similar to probability-based contracts in prediction markets such as Polymarket. These contracts are priced between $0.01 and $1, and the trading price fluctuates based on the market's assessment of the probability of a specific outcome. If the event occurs, the contract settles for $1 at expiration; if it does not occur, it returns to zero.
From commodity futures to the securities system, the focus is on predicting the regulatory responsibilities and powers of the market.
Most prediction market platforms, such as Polymarket, Kalshi, and Crypto.com, are currently under the commodity futures regulatory system and are regulated by the U.S. Futures Exchange Commission (CFTC).
However, if approved by Nasdaq, the product will be listed as a "securities option," falling under the SEC's regulatory purview. This could be a significant step towards bringing predictive trading instruments into the traditional securities market framework for the first time, and it also brings the jurisdictional boundaries between the SEC and the CFTC back into focus.
SEC Chairman Paul Atkins recently admitted that forecasting markets may involve "potentially overlapping jurisdictions," indicating that regulatory coordination still needs to be clarified.
Market trading volumes are hitting record highs as Wall Street accelerates its positioning.
The market is projected to continue expanding its trading volume over the past year. According to Dune data, Kalshi and Polymarket 's total trading volume reached a new high of $17.5 billion in February, reflecting a significant increase in market interest in these products.
Besides Nasdaq, other traditional Wall Street financial institutions are also actively expanding their presence. ICE, the parent company of the New York Stock Exchange, announced last year an investment of approximately $2 billion in Polymarket; CME Group partnered with sports betting platform FanDuel to launch a related app; and Cboe Global Markets is reportedly evaluating the relaunch of "all-or-nothing" binary options.
Event contracts are becoming part of traditional derivatives, blurring market boundaries.
Nasdaq's application represents not only product innovation but also a shift in the structure and attitude of the financial market. Crypto-native prediction market mechanisms are gradually merging with mainstream derivatives markets. If the application is approved, binary options could become a new product line for traditional stock exchanges, bringing stricter compliance standards and a broader investor base to prediction markets.
This article, "Nasdaq's foray into prediction markets, plans to launch 'yes or no' binary options," first appeared on ABMedia, a ABMedia .
