Nasdaq Bets Big: Yes-or-No Options on Top Indexes Approved
Published Date: 5/5/2026
Notice
Summary
Nasdaq MRX just got the green light to start listing and trading new binary options based on the Nasdaq-100 and Nasdaq-100 Micro indexes. This means investors can now bet on simple yes-or-no outcomes tied to these big market indexes, with trading kicking off soon. The change aims to offer fresh, exciting ways to trade options, potentially shaking up how people invest in broad market moves.
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Analyzed Economic Effects
8 provisions identified: 4 benefits, 3 costs, 1 mixed.
New Binary Index Options Listed
Nasdaq MRX is authorized to list and trade Outcome-Related Options (``OROs''), which are cash-settled, European-style binary options, on the Nasdaq-100 Index (Nasdaq-100 OROs) and the Nasdaq-100 Micro Index (XND OROs). Trading of these OROs will begin following the Exchange's implementation and is approved in the Commission notice filed April 30, 2026.
Fixed Payout and Contract Specs
OROs have an exercise settlement value of $1 and a contract multiplier of 100, producing a fixed exercise settlement amount of $100 per contract if the option settles in-the-money. OROs pay nothing if they expire out-of-the-money.
Low Price Entry and Premium Limits
Bids and offers for OROs must be in U.S. dollars and premiums may range from $0.01 to $1.00; minimum trading increment for OROs on broad-based indexes is $0.01. Trading hours follow existing options hours (until 4:15 p.m. each business day for broad-based index options).
Position Limits and Reporting Thresholds
OROs will have a position limit equal to 25,000 contracts on the same side of the market and position limits in OROs will not be aggregated with other options on the same underlying. The minimum position in an account that must be reported is 200 contracts.
Margin Rules: Cboe Requirements Apply
For OROs, the Exchange proposes to elect margin requirements consistent with Cboe Rule 10.3 (i.e., members must elect to be bound by the initial and maintenance margin requirements of the Chicago Board Options Exchange or NYSE as in effect; MRX proposes to elect Cboe's margins for OROs).
P.M.-Settlement and Settlement Source
Nasdaq-100 OROs and XND OROs will be P.M.-settled only (A.M.-settled OROs are not authorized). Settlement value will be the index value reported by Nasdaq at the conclusion of the Nasdaq Closing Cross (per Nasdaq Equity 4, Rule 4757), and cash delivery occurs the business day following expiration.
Certain Order Types Not Allowed
O Eligible order types include most standard orders, but Market Orders, Stop Orders, and Stop Limit Orders (as defined in Options 3, Section 7) are not permitted for OROs because they do not specify a price or require electing a price.
Disclosure and Suitability Requirements
Because OROs are standardized options, broker-dealers must provide customers a copy of the Options Disclosure Document (ODD) and must have a reasonable basis to believe a recommended ORO transaction is suitable for the customer (per FINRA Rule 2360(b)(16)(A) and FINRA Rule 2111).
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