Nasdaq follows Cboe joining world of ‘binary bets’ as prediction market craze hits Wall Street

The Nasdaq stock exchange wants to list binary options tied to its flagship stock indexes, a move that would let traders place yes-or-no bets on the direction of major equity benchmarks like the Nasdaq-100.

In a Monday filing with the U.S. Securities and Exchange Commission (SEC), the exchange said it also plans to offer binary options on the Nasdaq-100 Micro Index.

A binary option is a bet with only two outcomes. Either the condition is met, and the bettor walks away with a profit, or the option expires worthless. Nasdaq’s proposed contracts would be priced between 1 cent and $1, reflecting the market’s view of the probability that a specific outcome will occur.

If approved, the products would function similarly to contracts on prediction market platforms such as Polymarket and Kalshi, giving traders a new way to express short-term views on the performance of one of the market’s most closely watched stock indexes.

The filing marks Nasdaq’s entry into a fast-growing corner of derivatives markets that blends traditional finance with the mechanics of prediction platforms. Rival exchange Cboe also announced plans to expand into the prediction markets business as interest in event-based trading has surged.

That push follows the rapid growth of platforms such as Polymarket and Kalshi, which allow users to trade on the outcomes of events ranging from elections to economic data releases. Those platforms are regulated by the Commodity Futures Trading Commission (CFTC) because they offer event contracts tied to real-world outcomes.

Binary options, however, fall under the SEC’s jurisdiction. Nasdaq’s proposal underscores how established exchanges are seeking to adapt the prediction-style format to regulated securities markets. Nasdaq had not responded to a request for comment by publication time.

Crypto exchanges have also moved quickly.

Coinbase recently rolled out prediction markets on its platform, giving digital asset traders access to contracts linked to political, economic and cultural events. Gemini received CFTC approval in December to operate as a Designated Contract Market (DCM), allowing the firm to offer regulated prediction markets to U.S. customers.