Nasdaq has filed with the U.S. Securities and Exchange Commission for approval to introduce a binary options product linked to the Nasdaq 100 index, The Block reported on March 2, citing Bloomberg.

It marks Nasdaq's first formal move into products with the characteristics of prediction markets.

The filing includes a new contract type called an “outcome-linked option”. It would use both the Nasdaq 100 index and a smaller micro version index as underlying assets.

The structure is similar to prediction market platforms such as Polymarket and Kalshi. On prediction market platforms, contracts are settled at $1 if the prediction is correct and $0 if it is wrong. Nasdaq's product, however, would be classified as a securities option and overseen by the SEC, unlike existing event-based contracts under the jurisdiction of the Commodity Futures Trading Commission.

The popularity of prediction markets is also reflected in trading volume. Combined monthly trading volume for Kalshi and Polymarket reached about $18.4 billion in February, setting a record for a sixth consecutive month, according to The Block Data.

Beyond Nasdaq, the Chicago Board Options Exchange is reviewing a revival of binary options tied to financial indicators, and the Chicago Mercantile Exchange is expanding access to cryptocurrency derivatives in response to rising demand for 24-hour trading.