Nasdaq Seeks to Launch Prediction Markets
In a major move toward mainstream adoption, Nasdaq has filed with the SEC to launch its own prediction market "options." The proposed product would be tied to a major stock index, blurring the lines between traditional finance and event-based trading.
This move deliberately structures the products as "securities options" to fall under the SEC's jurisdiction, sidestepping the Commodity Futures Trading Commission (CFTC), which has been the primary regulator for the booming prediction market space. This positions the contracts within a familiar regulatory framework for Nasdaq, even as the CFTC asserts its own exclusive authority over event-based contracts. Nasdaq's proposed "Outcome Related Options" will be tied to the Nasdaq-100 Index and its smaller micro version. These binary contracts will allow traders to place yes-or-no bets on whether the index will close above or below a certain level by a set date, with contracts priced between $0.01 and $1 to reflect probabilities. The filing comes as combined monthly trading volume for prediction market leaders Kalshi and Polymarket reached approximately $18.4 billion in February, the sixth consecutive monthly record. This explosive growth has attracted not just exchanges but also major retail brokers, with Robinhood's prediction market hub becoming one of its fastest-growing revenue lines in 2025. This isn't the first attempt by a major exchange to offer such products, but it represents a significant push into the mainstream. Cboe Global Markets is also exploring a revival of similar "all-or-nothing" options, while Intercontinental Exchange (ICE), the owner of the NYSE, has invested up to $2 billion in the crypto-based prediction market, Polymarket. The regulatory landscape is intensely contested. The CFTC has been in legal battles with platforms like Kalshi and previously fined and banned Polymarket from serving U.S. customers. CFTC Chairman Michael Selig has publicly stated the agency will defend its exclusive jurisdiction against what he terms "overzealous state governments" and potential SEC overlap. Prediction markets themselves have a long history, dating back to 16th-century Italy and 19th-century U.S. election betting pools, which were often seen as more accurate than polls. Early modern online versions like Ireland's Intrade were shut down due to regulatory pressure in the U.S. before the current wave of CFTC-regulated and decentralized platforms emerged around 2020.
