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SEC Approves New Stock Market Prediction Tools
1 May
Summary
- SEC greenlit Nasdaq's new stock market prediction instruments.
- These are cash-settled binary options tied to major indices.
- Nasdaq MRX will initially list options on Nasdaq-100 indexes.
The Securities and Exchange Commission recently authorized Nasdaq's options trading platform to list and trade a novel class of stock market prediction instruments. This move signifies a growing interest in prediction markets, which enable users to wager on real-world event outcomes, offering new revenue and insights.
These new products are cash-settled contracts. They are designed as binary options, providing a fixed payout of $100 if they expire "in the money" based on a yes-or-no bet. Nasdaq MRX will initially list these options in conjunction with the Nasdaq-100 index and its micro-sized counterpart.
The Nasdaq-100 index comprises 100 of the largest non-financial companies listed on Nasdaq. The SEC granted accelerated approval for Nasdaq's proposal, confirming its consistency with regulatory requirements and absence of new concerns. Nasdaq welcomed the approval, while competitor Cboe Global Markets also plans similar contracts.
