Nasdaq Bets Big on Binary Options
Nasdaq has filed with the SEC to launch Outcome-Related Options on its flagship Nasdaq-100 and Nasdaq 100 micro indexes, signaling once again that the largest traditional institutions are quickly moving into the event-based market.
This move comes right after Cboe made its intentions about entering the binary options market clear just a few weeks ago.
If approved, the regulatory adoption of binary bets and event predictions by the largest financial institutions will mark a tectonic shift in how the largest exchanges compete for the retail traders.
As the filing reveals, these options will be priced between 1 cent and $1, mirroring the mechanics that made platforms like Kalshi and Polymarket a household name in the past two years.
The difference here is that this proposal will have to go through the SEC, while event markets are regulated by the CFTC.
This means that Nasdaq’s products would be classified as securities options in case of approval, ensuring that the contracts are backed by the OCC (Options Clearing Corporation), providing a level of credit-risk protection that decentralized platforms simply cannot match.
The timeline of this approval is not clear, and could span between several weeks to months.
If approved, it is widely considered that this would immediately trigger a race between retail brokers to quickly integrate binary contracts into their trading apps.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
