Nasdaq is seeking regulatory approval to introduce binary-style options tied to its flagship Nasdaq-100 index, marking the latest push by a major exchange operator into fast-growing prediction markets.
In a proposed rule change filed on 2 Mar with the US Securities and Exchange Commission, Nasdaq MRX, one of Nasdaq’s affiliated options exchanges, requested approval to list and trade Outcome-Related Options, or OROs, which are cash-settled, European-style contracts that pay a fixed amount depending on whether the Nasdaq-100 closes above or below a specified strike price at expiration.
The contracts would function as “yes-or-no” bets. Buyers would receive a fixed $100 payout per contract if the outcome condition is met, while sellers would owe the same amount if it is not. The options would trade with premiums between $0.01 and $1.00, reflecting the market’s implied probability of the event occurring.
Fixed payout structure
Unlike traditional Nasdaq-100 options, which pay out based on the magnitude of price moves, the proposed OROs would deliver a fixed return regardless of how far the index moves beyond the strike.
Nasdaq said the contracts would settle at the index’s official closing level, calculated through the Nasdaq Closing Cross at the end of the trading day. The product would also be available on the smaller Nasdaq-100 Micro Index, with position limits capped at 25,000 contracts per side.
The Nasdaq-100 tracks 100 of the largest non-financial companies listed on Nasdaq, including Apple, Microsoft, Nvidia and Amazon, making it one of the most closely watched gauges of large-cap technology stocks. The Micro version reflects one hundredth of that value, offering smaller contract exposure.
Under SEC oversight
While the contracts resemble prediction-style “yes-or-no” bets in structure, they differ in regulatory treatment. Nasdaq’s proposal is tied to a broad-based equity index and would be listed as an options product on a securities exchange, subject to SEC oversight and cleared through the Options Clearing Corporation. Other US options exchanges, including Cboe and NYSE American, already have rules permitting similar binary options products.
Event-based contracts offered on platforms such as Kalshi, by contrast, have generally been structured as commodities derivatives under the Commodity Exchange Act, an area where the Commodity Futures Trading Commission has claimed jurisdiction.
The SEC will now publish the proposal for public comment before determining whether to approve or disapprove the rule change.
