The US Securities and Exchange Commission has given Nasdaq the green light to launch a new type of options contract linked to its benchmark Nasdaq-100 index, marking another sign that prediction-style trading products are moving closer to mainstream finance. According to the regulator’s order, the exchange’s Nasdaq MRX venue will be allowed to list and trade cash-settled binary contracts that pay out a fixed sum at expiry depending on whether the index finishes above or below a specified threshold.

Nasdaq’s first products will be tied to the Nasdaq-100 and a micro version of the index, which tracks one-hundredth of the larger benchmark’s value. The Nasdaq-100 includes major non-financial names such as Apple, Nvidia and Intel, and the new contracts will use that familiar market reference point to offer a yes-or-no payoff structure. The SEC said the instruments would have a fixed, all-or-nothing settlement amount of $100 if they expire in the money, and it granted accelerated approval after concluding that the proposal did not raise new regulatory concerns.

The move comes as exchanges and trading platforms race to capture growing demand for prediction markets, which let users wager on real-world outcomes and have been drawing both retail interest and institutional attention. According to Business Standard and other market reports, Nasdaq submitted its proposal in March, and the approval gives it a path to compete in a segment that has been expanding rapidly. Some firms see these products as a way to open fresh revenue streams while also producing market signals that may appeal to traders looking for short-horizon views.

Nasdaq said it welcomed the SEC’s decision, describing the contracts as Outcome-Related Options. The company’s push places it alongside rivals such as Cboe Global Markets, which is also targeting a launch for similar all-or-none contracts subject to regulatory approval. Market coverage has also pointed to the broader rivalry between the Securities and Exchange Commission and the Commodity Futures Trading Commission over where prediction-style products should sit in the regulatory system, a question likely to shape how far this market can grow.

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Source: Noah Wire Services