Source: Fortune
Summary
CME Group Inc. is set to launch single-stock futures on over 50 of the largest US companies, allowing investors to hedge or speculate on stocks without trading shares. The contracts will be cash-settled and offer leverage without the complexity of options. CME is targeting retail traders and institutional investors, and has lined up over 35 retail intermediaries to help get the futures in front of them. The launch comes at a sensitive time for the exchange, as it faces competition from other derivatives exchanges and prediction markets.
Our Reading
The strategy enters a familiar phase.
CME Group is reviving single-stock futures, a product that failed to gain traction in the US 24 years ago. The exchange is betting on the rise of retail trading and the current market environment to make the product a success this time around. The contracts will be available to trade 23 hours a day, five days a week, and will come in two sizes. CME is targeting retail traders and institutional investors, and has lined up over 35 retail intermediaries to help get the futures in front of them. The launch comes as CME faces competition from other derivatives exchanges and prediction markets.
Investors will soon have another way to bet on hot stocks without trading a single share.
Author: Evan Null
