Binary options on Nasdaq 100 could draw retail traders

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Yaroslav Dmytrenko

02.03.2026

Binary options on Nasdaq 100 could draw retail traders — Nasdaq seeks SEC approval for binary options Nasdaq 100

Nasdaq has submitted an application to the U.S. Securities and Exchange Commission (SEC) seeking regulatory approval to launch binary “yes/no” options tied to its flagship Nasdaq 100 index. This is the exchange’s first formal step toward products resembling prediction markets.

Highlights

Nasdaq seeks SEC approval for binary options on Nasdaq 100.
Contracts mirror prediction markets but focus on financial indices.
New instruments may attract both institutional and retail traders.

Nasdaq promises a new class of contracts

According to Bloomberg, the proposal describes a new type of “outcome-based” option linked both to the Nasdaq 100 and its micro counterpart. Prices for these instruments will range from $0.01 to $1, moving toward extreme values depending on traders’ probability assessments.

If approved, these contracts will be listed under SEC oversight, distinguishing them from many event-based contracts governed by the Commodity Futures Trading Commission (CFTC). Observers note that Nasdaq’s proposal mirrors the probabilistic format popular on prediction market platforms like Polymarket and Kalshi, where contracts typically settle at $1 if an event occurs and expire worthless if it does not.

Prediction markets drive traditional exchanges

Derivative exchanges are actively seeking regulated alternatives to prediction market contracts, as trading volumes continue to set new records. According to The Block, combined monthly trading volume on Kalshi and Polymarket reached approximately $18.4 billion in February, marking the sixth consecutive record month. In January, volume exceeded $17 billion.

Cboe Global Markets is exploring a revival of “all-or-nothing” binary options tied to financial benchmarks, while CME Group is expanding access to crypto derivatives amid demand for 24/7 trading.

This surge in activity occurs amid increased regulatory scrutiny of prediction markets, which have faced criticism over potential manipulation and insider trading. Earlier this month, SEC Chair Gary Gensler described prediction markets as a “significant concern,” citing potential overlap between SEC and CFTC authority.

Who is this product for?

Nasdaq’s proposal could be a turning point in institutionalizing binary instruments in the U.S. Unlike political or social prediction markets, Nasdaq contracts are based on a financial index, reducing regulatory and reputational risk and making the product more attractive to institutional investors. The exchange effectively seeks to integrate probabilistic trading mechanics into the traditional regulated derivatives infrastructure.

Moreover, these instruments could appeal to a new category of retail traders, who may find binary “higher/lower” logic simpler than complex classical option strategies. This could also increase competition between regulated exchanges and decentralized prediction markets, gradually drawing liquidity under SEC jurisdiction and enhancing oversight of this rapidly growing segment of probabilistic contracts.

As we wrote, Nasdaq files application to list Canary HBAR-ETF

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