The CME Is Becoming the DraftKings of Exchanges
One of the world’s largest marketplaces for derivatives wants more retail traffic, but at what cost?
Pure gambling.
Photographer: Anthony Kwan/ Bloomberg via Getty Images
One of the world’s largest derivatives exchanges is making a dangerous play for retail investors.
CME Group Inc. plans to offer the trading masses options to punt on whether stocks, gold, oil – or virtually any other asset – will rise on a given day. These will be yes/no contracts, such as: do you think stocks will rise today? If you answer “yes,” and the market finishes up, the contract pays off. If you answer “yes,” and the market goes down, the option expires worthless. Contracts like these have been popularized by sports- and politics-betting sites. And so, with every passing day, the markets asymptotically approach the financial sophistication of DraftKings Inc.