March 2 (Reuters) – Nasdaq has sought approval from the U.S. Securities and Exchange Commission to roll out prediction markets options on a major stock index, according to a regulatory filing.
Major U.S. exchange operators are increasingly seeking to tap into the event prediction markets space, which allow users to bet on the outcomes of real-world events and has surged into the mainstream since the 2024 U.S. presidential race.
The New York-based exchange operator is seeking to list binary options on its Nasdaq 100 index and the Nasdaq 100 micro index, according to the proposal.
The so-called Outcome-Related Options will be priced between 1 cent and $1 and let traders bet on binary outcomes of a specific event.
A binary option – also known as “all-or-nothing” option – is a type of contract that offers payout based on the outcome of a yes-or-no bet.
The Nasdaq 100 tracks 100 of the largest, non-financial companies listed on Nasdaq’s exchange, including Apple, Nvidia and Intel. The micro index is based on 1/100th of the full value of the Nasdaq 100.
Top Nasdaq executives said last week the firm was going to very focused on the Nasdaq 100 index to start its predictions markets foray.
While the CME Group, overseen by the Commodity Futures Trading Commission, has made big moves to capture retail demand, SEC-monitored players such as Nasdaq and Cboe have been more measured given the evolving regulatory environment around these contracts.
Options heavyweight Cboe is also targeting a second-quarter launch for its “all-or-none” styled contracts focused on financial and economic events, subject to regulatory approvals.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Leroy Leo)
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