The stock exchange tapped a duo that includes Robert Whaley, who developed the CBOE Market Volatility Index, to design the new "Alpha Indexes." With regulators' approval, Nasdaq will offer derivatives to bet on or guard against moves in the new measures—something Mr. Whaley envisions letting investors screen out even a stock-market crash from the returns of popular holdings like Apple Inc. or Citigroup Inc.
"The idea is to isolate what I'm focused on and get rid of the market bet," said Mr. Whaley, who is a professor at Vanderbilt University's Owen Graduate School of Management. The indexes, which Mr. Whaley co-developed with university colleague Jacob Sagi, are to be presented this week at the Futures Industry Association's Futures & Options Expo in Chicago. Nasdaq hopes to launch the derivatives built around the indexes early next year.