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- [00:00]
Ecolab Narrator
Your best bottling plant employs 3,300 people. How do you get 3,300 people working at peak efficiency? Your best store has reduced waste water and energy usage. How do you make every store like your best store? Your best property has every guest raving. How do you make every property like your best property? The answer is Ecolab. Better performance, better outcomes, better impact. Ecolab. Now every location is your best location.
- [00:30]
Akshat Ratty
There are two kinds of people in the world. People who think about climate change and people who are doing something about it. On the Zero podcast we talk to both kinds of people. People you've heard of, like Bill Gates.
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Joe Weisenthal
I'm looking at what the world has.
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Terry Duffy
To do to get to zero. Not using climate as a moral crusade.
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Akshat Ratty
And the creative minds you haven't heard of yet. It is serious stuff, but never mind. Doom and gloom. I am Akshat Ratty. Listen to Zero every Thursday from Bloomberg Podcasts on Apple, Spotify or anywhere else you get your podcasts.
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Joe Weisenthal
Bloomberg Audio Studios, Podcasts, radio news.
- [01:18]
Tracy Alloway
Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway.
- [01:22]
Joe Weisenthal
And I'm Joe Weisenthal.
- [01:24]
Tracy Alloway
Joe, we are here in Chicago.
- [01:25]
Joe Weisenthal
I love it here so much. We don't come here enough.
- [01:28]
Tracy Alloway
I agree. Chicago is an amazing city. It's also just such an interesting city from a financial perspective. And it has that old school, you know, mercantile Midwest kind of feel.
- [01:39]
Joe Weisenthal
Totally. I mean, it's what's cool about Chicago. There are many cool things, but it obviously has the history of trading and pits and, you know, trading pigs and all that stuff. And it's still a city that's at the cutting edge of trading. And so it's pretty cool that like the history is like not is history. It's still, when I think of Capital T trading, I usually think of Chicago.
- [02:01]
Tracy Alloway
Absolutely. And one of the themes for our trip to Chicago this time is trading and the evolution of trading and also the retail revolution that we're seeing. And on that note, we have some very interesting partnerships that have been developing between, I guess, old school exchanges and more, let's just say more retail oriented platforms.
- [02:20]
Joe Weisenthal
So I think there's the thing that I think is really interesting that's going on in financial markets, among many other things, is it seems like there's two different entities that are trying to cannibalize each other. And the way I think about it is you have these sort of legacy. Well, you have essentially these sort of maybe like gambling oriented entities or what people think of as speculating, wanting to look more like Legacy financial institutions. And you have legacy financial institutions that want to subsume the sort of high speed trading, speculative gambling impulse of many young retail traders. And it's like, which one will swallow the other? Will it be that I trade on my sports app? Well, is it. Will I be trading cotton futures on my sports app or will be the opposite? Will I be going to a traditional brokerage to place bets on a Raiders game?
- [03:14]
Tracy Alloway
That's a great way of putting it. I also have to say there's a little bit of an irony here because a lot of the old school exchanges used to be criticized for enabling gambling in derivatives contracts. Right. And now, and now are considering sports betting.
- [03:27]
Joe Weisenthal
Doors are all flung open.
- [03:28]
Tracy Alloway
It's. It's all very confusing. But I have to say we have the perfect guest to talk about the cutting edge of trading and the retail revolution. We've had him on before. He was great. We're going to be speaking with Terry Duffy, the chairman and CEO of cme. So, Terry, thank you so much for coming back on Oddballs.
- [03:44]
Terry Duffy
Tracy, Joe, thank you very much for having me. Appreciate you being here in Chicago also.
- [03:49]
Tracy Alloway
Well, the last time we saw you two years ago, you said we were going to be replaced by AI and that hasn't happened. So I'm very happy that we're back and talking to you in.
- [03:57]
Terry Duffy
Do you have a tape of that? Because I'm not sure that's true.
- [03:59]
Tracy Alloway
I got proof. I got the transcript.
- [04:01]
Terry Duffy
Everybody remembers something. But let me see the proof.
- [04:04]
Tracy Alloway
I'll send it to you after this. All right, so one of the reasons we want to talk to you about retail trading specifically is because CME just announced this partnership with FanDuel where you're going to be offering these sort of event contracts. Walk us through exactly what the partnership entails.
- [04:20]
Terry Duffy
Well, the partnership is really interesting from a whole host of reasons. I believe that the market in general has changed and the evolution of the market has changed. The participants have changed. And we can all determine why that is. We can listen to what Joe said in his opening about how traditional exchanges want to have the gaming clients in their world. Or we could say that the gaming clients want to have the traditional finance people in their worlds. These worlds have been clashing for quite some time now. Why is that? It's all because of technology. Technology has enabled the participant from all levels to be on a level playing field. So example being institutional participants traditionally have the greatest technology. And in return, the products were custom sized for institutional participants. As the markets evolved, retail participants want to be able to participate, but they really couldn't participate at the size of a contract that the institutions can. So we customized over the last several years smaller and smaller contracts where they went from E Minis to Micros and potentially Nanos. Now we're looking into the prediction markets going forward. Why is that? Well, there's a host of reasons, but like I said, technology. And let's talk about it again. Artificial intelligence, it's the hottest thing God put on the planet right now as far as financial services go. Because otherwise the stock market would not be trading where it's at today. Because the market has been driven primarily by artificial intelligence stocks over the last 48 months for sure. There's no other stocks really participating to weigh Nvidia and some of the other big ones are. So my point being is today the guy that would never be able to trade futures because he's got a $500 account or $1,000 account or that's what he has available to participate in. Now we're able to give him the technology that Goldman Sachs may or may not have, that some of the biggest hedge funds in the world may or may not have. How he or she deploys that is up to them, but they're going to have access to that technology. That's why these worlds are colliding. And I think it's massively exciting about the future. And people listen, we're going to have the biggest wealth transfer by 2040. We're going to have $80 trillion go from, I think it's 2050 from the existing population to people of the age of 40 to 24, $85 trillion of wealth transfer. Those people want to be in control of their own destiny. Why? Because they've grown up in control of their own destinies. Today, that age group, whether it's through the apps on their phone or other things. So I think having access to all different constituencies is really important. And so I'm excited by the future of this marketplace.
- [07:18]
Joe Weisenthal
Let's just talk more details on FanDuel. Is the idea basically that say I'm or I've never gotten into sports betting, but suppose I did. Suppose I were and I open an app and I see the line for the upcoming Raiders Bears game or whatever it is. Is the idea that in that same app I may see the price of some. The gold futures or interest rate futures or something that I can trade at a monetary denomination that is sort of we associate with retail level. Is that the specific product or service that the CME is going to be offering with FanDuel.
- [07:55]
Terry Duffy
So, Joe. Yes, it's similar to that. So today FanDuel is set up a little bit different than some of their competitors. They don't have one app for all different services. They have single apps for different services where some of the other ones have different apps. And for whatever reason they feel it's an advantage. So there will be a Markets app, a FanDuel Markets app powered by CME Group. When you open up their homepage, you'll go to that app and then you'll see in there we'll have potentially three to four event contracts a day per asset class. The events will go on for approximately 60 minutes. They're not like a sporting event that goes on throughout the event. It will be a 60 minute window. Then we will say, will the price of gold be above or below $3,700.
- [08:42]
Joe Weisenthal
An ounce at the end of that 60 minutes?
- [08:44]
Tracy Alloway
Yes, they're very binary.
- [08:46]
Terry Duffy
And you will see as the opening of that event starts where the price is set, and it might be set at 50 cents, it's going to be above it because it's kind of in the middle, or if it's higher, it might be 80 cents to say it's going to be above it. But there's nothing to say it's going to be above it. So you'll have people taking both sides, expressing their interest on the value of gold, which will also give us the ability because we have the liquidity providers in our core asset classes. So the deep pools of liquidity with this will be amazing.
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Joe Weisenthal
Just to be clear, is the 60 minute window, is that just like the first round? Like eventually, do you anticipate that it'll be weekly or monthly or something that resembles the time intervals of traditional.
- [09:29]
Terry Duffy
It's a great question, Joe. So what, what we're going to do is we'll probably run three events a day. Okay, for say, gold, we'll run three events a day. For crude oil, we'll run three events a Day. For the S&P 500, we'll run three events a DAY. For some of our other asset classes, Treasuries. And these will be multiple events, but they're only going to be an hour long. But we'll probably run three to four sessions every day. So there'll be an hour per session and that will run five days a week for markets. And if in fact FanDuel wants to put sports up there, as you know, those are weekend events as well.
- [10:04]
Tracy Alloway
Well, let me ask the really sexy question then. How exactly are these trades or Contracts structured. And you mentioned the liquidity providers there. Walk us through exactly the mechanics of these trades. Who are the provider? What does the market making look like? Are they being cleared? How does it all work?
- [10:21]
Terry Duffy
They will be centrally cleared through CME's clearinghouse. So yes, they will be. The market structure will not look too dissimilar to what we have today. The market participants. We have multiple market makers versus where some of our competitors have a single market maker doing this. We will have. As you know, at CME Group, we have a lot of market makers in our different products. They will have access to these event contracts and they will create the liquidity throughout the day and we will incent them to make sure that the participants have a tight, deep market. So that's basically how it'll work, Tracy.
- [10:52]
Tracy Alloway
And do the market makers have to hedge their exposure, or are these contracts so small that it's not a big deal?
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Terry Duffy
Well, you know, small contracts can be small, Tracy, but as you know, you trade enough of anything that's small turns into something big.
- [11:04]
Tracy Alloway
And I'm sure you want this to be big trading.
- [11:06]
Terry Duffy
Of course we do so. But they will have access to lay off that risk in the primary markets. And that's the big difference with our offering. So we. We will be offering our deep liquid products and we'll have events with them. So our market makers will seamlessly be able to offset these contracts.
- [11:22]
Joe Weisenthal
You said in the beginning.
- [11:24]
Terry Duffy
Or not, by the way. Or not. That's up to them.
- [11:26]
Joe Weisenthal
You said in the beginning that technology is part of the story of why these two worlds of gambling versus legacy finance have been colliding or maybe merging, et cetera. And I believe that. And I also believe that there is no such thing as a bright line between what's investing and what's speculation. There's a lot of debate about all of that. But is another element here essentially that the norms have changed? There used to be an expectation that retail investors didn't have access to, say, like private investments. It used to be much harder to gamble on sports, period. There's been a big change in the norms, it seems, and then follow on regulation such that by and large, it seems to be conventional wisdom that people should be really allowed to trade anything they want on anything they want.
- [12:19]
Terry Duffy
Well, I think there's some truth to that, but I think there's a pretty broad brush. Should people be able to trade anything they want and anything they want? I think you listen. Regulation breeds credibility to any product. And if it's not regulated to a point and it's the Wild West. Somebody's going to get hurt. And that's not what a company like mine that I'm the chairman and CEO of, and I have been for the last 23, 24 years now, that's not something that I would want to bring forward into this company. You said something else that I, and I'm going to get back to the regulatory part, but you said something really interesting. Is it investing or is it speculating? Let me ask you a question. This is rhetorical. You ever see an investment that doesn't have, if you're making an investment, you need somebody to take the opposite side of that trade. And if another investor is going the same direction, there's reasons why Oracle went up 30% two weeks ago after their announcement. Why? Because no one wanted to get run over by a freight train. But you need speculation in order to increase investment. So I think that, you know, people say that speculators are bad for the market. Well, who's going to create the liquidity for the investors if we don't have speculators? So that's point one. Going back to the regulation, I think that when you look at the regulation for these products, we, we have to let the participants be made aware through education and other tools of what the rules of the road are. And I think right now, with the crypto world where it's going right now, and some of the other marketplaces where they're at on the predictions, I think there's some confusion. I'm going to be doing a roundtable in D.C. this coming Monday associated with just these type of topics. What's innovation, what's not. And so, Joe, I think your questions are really, really strong. And that's one of the reasons I'm doing this deal with FanDuel, because I want to walk before I run here. I think it's really important. But I do want to make sure that the retail participant has the ability to participate at their level. That's why these contracts will be binary in nature. That's why these contracts will be a dollar. So anybody can participate. But again, I think that the ultimate regulatory framework as it goes forward has yet to be harmonize, for a lack of a better term, between traditional marketplaces. And now we're looking at event contracts on sports and other indices. So I'm excited by this, Joe, but I think there's a lot of what you said in your question that's yet to be answered. And the problem is right now there's a lot of people going out with offerings before. These questions have been asked, answered, or for sure studied.
- [14:52]
Joe Weisenthal
We've talked to some and we're talking to some more of them for sure.
- [15:11]
Ecolab Narrator
Your best restaurant location gets five star reviews. How do you make every location like your best location? Your best paper mill has been operating at peak productivity. How do you make every mill like your best mill? Your best data center has optimized every drop of water. How do you make every data center like your best data center? The answer is Ecolab. Better performance, better outcomes, better impact. Ecolab. Now every location is your best location.
- [15:41]
Tracy Alloway
Okay, well, speaking of regulatory harmonization, I'm just gonna, I'm gonna hit all the really provocative topics today and ask about tax treatment because my understanding is that losses on futures contracts are treated differently under new tax rules than losses on platforms for sports betting and things like that. How much of the interest that you're seeing from places like FanDuel and other markets is coming from, I guess the possibility of people being able to trade with futures contracts or bet using futures contracts and not having to pay as much in tax.
- [16:15]
Terry Duffy
So let's make sure we understand both sides of the equation. You said only losses, gains as well. So we'll talk about tax treatment in general. So what Tracy's referring to listeners at Odd Lots is what's called 1256 contracts under the tax code, which allows people to get a blended rate of 60, 40 tax treatment 60 long term gains, 40 short term comes out to a blended rate of about 27%. Futures contracts cannot get long term capital gains because of the way they expire today. So we don't get long term capital. So we get what's called 1256 treatment. That's what Tracy, I believe you're referring to.
- [16:52]
Tracy Alloway
That was a great explanation by the way.
- [16:53]
Terry Duffy
Thank you.
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Tracy Alloway
You should host.
- [16:54]
Terry Duffy
Thank you. Anyway, the 1256 contract. So when you talk about sports, sports will not be treated on event contracts under the 1256 regulation. But gold equities, all our other core businesses on events, we will believe that they are event futures, not event swaps. So swaps are not treated under 1256 futures are. So we think our events on our market participants and those products will be treated with the same tax treatment we get today for our other businesses. And then events such as entertainment, such as political events and sporting events will be traded as ordinary income.
- [17:39]
Tracy Alloway
Got it.
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Joe Weisenthal
Are you going to enter political betting markets?
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Terry Duffy
I would not take anything off the table. It's not something that I support support at this moment. But there's a lot of things I think when people say they don't support and then all of a sudden they do it and you go, well, what changed your mind? And you don't have a good reason. So I never said I wouldn't list bitcoin. I just thought it was important to make sure that the timing is right. So I waited till 2017. Then one day I said, today's the day, because the timing seems right to me. So I never said I wouldn't do it. Even though there was a lot of people between 2008, when the price of Bitcoin was $8 to 2017, when I listed it, that said that this stuff is tulips. It's garbage. Don't trade it.
- [18:25]
Joe Weisenthal
All right, let's hear your thinking on the politics markets.
- [18:28]
Terry Duffy
So I'm going to. I know, I know we're going to get to the politics. So I don't believe right now that event markets on politics are a good thing. That's my take on it. I want to see how it goes out. I didn't like male mail in voting either. I thought voting should have been in person historically. But my mind has changed on that, too, for a whole host of reasons, because now we get more participants and we have technology to protect against bad behavior in voting. I think we can get the same on these event contracts for different events. I don't know if it's there or not yet. We've had one political event contract that was listed so far that we're aware of, and that was the presidential election. Right. So that's, for the most part, that's all that's happened. I think that's kind of a small sample of political event contracts to base your decision on. Is this good or bad? So I kind of want to see how it goes. Joe, to answer your question, so I don't see the rush to get into it, and the reason why I don't see the rush to get into it. If you look at CME today with XRP on the Ripple crypto contract, we are the premier place for people to mitigate and manage risk on Ripple. Now, I was one of the last people to get into crypto in 2017, but yet we have one of the biggest marketplaces. I just listed Ripple. So the credibility of CME is very important to me. I think it's important to my customers as well. That's why I'm very cautious about some of these political contracts. So I'm. That's why I was trying to tie the two together.
- [19:57]
Joe Weisenthal
All right, sorry.
- [19:58]
Terry Duffy
Fair enough.
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Joe Weisenthal
Yeah. Fair enough.
- [19:59]
Terry Duffy
Yeah.
- [20:00]
Tracy Alloway
So you mentioned going to a roundtable next week and I believe that's the one being held in D.C. is that right? Okay. So I know the CEO of Calchi is supposed to be there.
- [20:11]
Terry Duffy
Never met him.
- [20:11]
Tracy Alloway
One of the preeminent prediction markets in the world. When you see him, what questions would you ask in order to better understand political prediction markets?
- [20:21]
Joe Weisenthal
I mean, we're interviewing him tonight in Chicago.
- [20:23]
Tracy Alloway
I know.
- [20:23]
Joe Weisenthal
Basically Tracy's asking, I know what do my research for me. Ask him.
- [20:27]
Terry Duffy
I don't know the gentleman. I've never met the gentleman. I have no idea. I think what's important is that he understands that we because the CFTC and that's what they are suggesting right now, which is true. So I'm not saying what he's saying is wrong. They self certify these contracts. Does it make it right for him to list all these different contracts? Because the CFTC's got 24 hours to make a decision to either stop it or, or let it go. Is really hard under the self certification process to understand anything in 24 hours, especially for the government. So the question I would have for him, as I do for myself, is how are these, some of these contracts not novel and complex? And don't you believe that your investors need a little bit more time by the government agencies to make sure that everyone's comfortable so you can offer them in a way that is very sound mind and sound business to grow them versus just going out there after 24 hours of nobody objecting and now you're promoting, and he is promoting that these are CFTC approved products. They're technically. That is wrong. They are not CFTC approved products. What they are is they have not been opposed by the cftc. There's a big difference there. And that's the part that they are not disclosing to their user base. And so I would say to him or others, and I will say it because I say what I want to say to people respectfully, I think disclosure is good. It's like payment for order flow. I don't think payment for order flow should be on the 34th page of a perspective. Put it up front. Tell the clients that's what you're doing and nobody's got a concern with it. But we don't because why? And I would say that people are maybe a little thinking that maybe it shouldn't happen. I think it helps the marketplace. But tell people that earlier. And I think that's what you guys should ask him. Why won't you say that these are not approved, they're just not objected to.
- [22:26]
Tracy Alloway
Joe, I'm going to do my best Terry Duffy impression tonight and just ask that question verbatim.
- [22:31]
Terry Duffy
And if you, if you drop my name, boy, Monday could be a lot of fun.
- [22:34]
Joe Weisenthal
Okay, great. But no, this gets to my question about norms because, like, so, political prediction markets have existed in the US on very small scale for maybe like 20 years. There was the Iowa. It was an experimental thing.
- [22:48]
Terry Duffy
Yeah, you're right.
- [22:49]
Joe Weisenthal
University of Iowa, et cetera. It feels like the floodgates have gone open and that actually under the last administration, for better or worse, Kelshi Polymarket, which, it's another sort of can of worms, they were under a lot of regulatory scrutiny, investigations, and they still operated, et cetera. Now it seems like the door's been flung open, maybe. It basically seems like we have, whether from a strictly legal perspective or a cultural perspective, very little appetite in this country to say, you can't do this. It feels like, yeah, the barn door is open on a lot of this.
- [23:27]
Terry Duffy
So, Joe, let's talk about that a little bit because I think it's interesting the under the Commodity Exchange act, there is a provision where a contract cannot be readily manipulable.
- [23:38]
Joe Weisenthal
Okay.
- [23:38]
Terry Duffy
All right. So that's a law. So when we're looking at prediction markets on political outcomes and we're talking about a presidential election, we're talking about 100 plus million people potentially voting. With the, with the base of voters more open than that. Fine. Okay. Maybe we say, understand, okay, that's no different than some of these other big markets. That's a big market all of a sudden. Now we'll take it down to the Congress. We have less people voting in a congressional race for Congress. Correct. So every member, every 500,000 people gets a member of Congress in the United States. So now you got 500,000 people of a population gets a member of Congress. The voting population for that is much, much smaller, that's eligible to vote. Now, let's take it to the next level. We have got a local mayor's race in a suburb that you live in that there is 500 people there. Do you want a prediction market on that? Because I'll tell you what, I can probably buy that election and have my prediction market pay off in a big way, and that would be deemed readily manipulable. Now, I gave you a pretty wild spectrum there.
- [24:46]
Joe Weisenthal
Sure.
- [24:46]
Terry Duffy
But I think you have to look at it in that range. That's my whole point. What I said to Tracy earlier, we have to Let people know what they're doing. Because every political event is not a presidential election. There are some political events that are so small that could be deemed readily manipulable. And. And you don't ever want to get in that situation because that's how you destroy innovation. And that's my concern with some of the political markets.
- [25:10]
Tracy Alloway
Joe, remember when we did that live experiment at our show? What was our big takeaway from that?
- [25:17]
Joe Weisenthal
I don't remember a takeaway. It was very funny. It was the. When we had the manifold market of whether Zvi Moshowitz would be on the Outlaws podcast and then we brought him on stage and we saw the price adjust in real time.
- [25:28]
Tracy Alloway
Just to be clear, we did not bet that he was going to be on the podcast.
- [25:32]
Joe Weisenthal
But.
- [25:32]
Tracy Alloway
But, you know, he could have.
- [25:33]
Joe Weisenthal
We could have.
- [25:34]
Tracy Alloway
He could have.
- [25:35]
Joe Weisenthal
He could have.
- [25:35]
Tracy Alloway
He could have. Certainly. Okay, let's broaden out the conversation a little bit to overall retail trading, which has obviously become a big part of your business. When you think about the evolution of retail trading at CME over the past few years, what are the biggest takeaways in terms of, I guess, the needs or concerns of a retail trader versus an institutional or professional one? Obviously you talked about contract size earlier, but like, what else do you see out there in terms of key differences?
- [26:05]
Terry Duffy
I think the key difference is the ease of access for the retail participant to sign onto a platform. Historically, it's been very, very difficult and a very difficult process to sign up to trade markets, whether they're securities or whether they're futures. So the retail participant will go through an application and probably get to halfway through page one and go, you know, this, this is ridiculous. There's a reason why Tracy and Joe, that the dark market or the illegal market in gambling is still about three times larger than the regulated marketplace because people just don't want to be have that exposure of giving out their information. Right. So that it's still a very large market, the illegal gaming market. I think that when you create a greater ease for people, which is going on right now for us, especially with the FanDuel, you'll go through an app, it'll be a five click process and you'll be ready to go. That historically has never happened. Secondly, the retail participants have never had a place to go to clear their trades. As you know, at cme, we don't directly take clients. They have to come through one of our member clients. So those people didn't want some of these really small clients because they were a risk. But technology all of a sudden has allowed the risk management tools to let them participate and you could do. And the one thing I liked about Sam Bankman's offering, and I give Sam credit for this, was auto liquidating. Auto liquidation is something that a lot of people have already implemented. They call it something different. So that risk management tools that we have in place, that others have in place, has now allowed us to take on the retail clients and the ease of them coming in. Thirdly, I think it's really important that you educate them what exactly they're doing. And futures can be very frightening. People get very frightened. Like during the pandemic, when the explosion of day trading started to happen again, there was a lot of people that were on some of these retail platforms that had positions on that don't even know how they got them on because they didn't understand it. But they were almost embarrassed to ask what happened, whether they got caught up in an option straddle or something else. They did not even realize what happened. So education is key, and that's one of the things that we have been constantly hammering home. So that's why I think the retail business is very exciting for CME and for other platforms around the world. Ecosystems are important. One of the things I tell my team all the time, I said, you better look over your shoulder and see a line of clients always coming. Because the day you look over your shoulder and it's gone, you're in trouble. And if you want to be a gigantic institutional player, I think that's great, and that's what CME is. But we have to make sure that we can move laterally left and right. If you look at historically the growth of markets and what's happened in the 90s, there's a building across the street from me, it used to be called the Sears Tower, okay? Named after Sears and Roebuck. They got naming rights over it. When Sears was flying in the 90s, 80s and 90s, they never heard of a company called Amazon. Nobody knows what a Sears is anymore. Sears is gone for the most part. Right? So why did that happen? Because they didn't adapt. Because they felt that their vertical was so strong, along with some of the other ones. And these other new participants came in and destroyed them. I cannot allow that to happen. So for me to participate in the new world and protect the world that's going on today is really important.
- [29:20]
Tracy Alloway
My dad used to love Sears, Joe, because he said, you can always find a parking space there.
- [29:24]
Joe Weisenthal
Oh, that's a great. That's a great reason to shop somewhere. Well, actually, let's pick up on the Sears versus Amazon. There could be someone who listens to this conversation and hears your concern about the speed with which Kelshi lists contracts that aren't, you know, technically CFTC endorsed. And they might say Terry is trying to keep his position by dint of regulatory mode, et cetera, that ultimately Kelshi or any other, but they're the ones in the headlines these days that they could potentially be a major player in futures in the future. And that one reason to talk about these concerns is regulatory concern. And also, you know, like, there's not like a ton, you know, you, as the cme, I believe, correct me if I'm wrong, have had very strong pricing power for your futures. And in most of finance, margins have generally been going down, fees have been going down, brokerage costs have been going down. Someone might hear the story and say you're trying to protect your ability to continually expand price by doing things like going to Washington and warning them about how scary it is, these new prediction markets.
- [30:39]
Terry Duffy
Well, first of all, I wouldn't do that because I'm partnering with FanDuel. So that's not something I'm prepared to go say these new prediction markets. I will say that certain prediction markets could be potentially scary, like political outcomes and things of that nature. So I wouldn't say all prediction markets are scary. So I think that's a bit of an overstatement. Second of all, on pricing power, if you look at the price of CME today on a per contract basis, it's cheaper now than it was 20, 25 years ago. So you might say to me, how could that possibly be? You got all this pricing power. Well, there is also another company. As long as we're talking about retailers, let's talk about Walmart. There's a Walmart model. How about selling something for less, but selling a hell of a lot more of it? My volume today, I do more in the first hour than I did in a week back in 2002. So the question is, we do more because we have access to around the world, which allows me to make CME more.
- [31:29]
Joe Weisenthal
Prices have not compressed or prices have. Your prices have compressed.
- [31:33]
Terry Duffy
My prices today versus what they were in O2 are completely different because when you look at the headline price, you're not looking at the tiered pricing that certain constituents get for volume. So volume pricing discounts are massive within our world. So that is a big deal. So my average rate per contract, 69, 70 cents a contract. You know, it can be higher or lower, but the volume could be a lot, a lot less too. So we do quite well with the model that we have. But we also have pricing on market data and other products that's, that's proprietary to CME that you may charge different for. So that's different. I don't go to Washington to ever be anti competitive because if I'm going to be anti competitive, it doesn't serve my interest for the long run. Anti competitive people in nature is. Is good for the short term, but really bad for the long term because you want that ecosystem, as I said earlier, to continue to grow. And if you're smart and innovative enough, you will grow with it. And that's one of the things that I'm looking at with CME. That's why I did a deal with FanDuel. FanDuel has 13 million accounts active today in the United States. Those will have access to my products. I never had that before. Yeah, we're doing things with our retail participants today that I think some of my predecessors over the years ago. What the hell has he done that we never would have done before? You know, and I believe that if we still did nothing around innovation, we would be trading pork bellies. We would be trading onions, which are illegal. They dumped them all in the river and kept the burlap sacks. Pork bellies are gone. They're no longer here. So we'd be out of business. Is my. Is the.
- [33:07]
Joe Weisenthal
I think when you go to Washington, maybe tell they gotta fix that onion thing.
- [33:10]
Tracy Alloway
Ask if they can set up a prediction market, fix that onion thing.
- [33:14]
Joe Weisenthal
Tell them they got this.
- [33:15]
Terry Duffy
It's the only commodity in the world that's banned by Congress. I know and I think we talked about that last time we were together. But I think Joe, to your point is I don't go there saying this is bad or this is good. I go there and say, let's have eyes wide open. That's all I want. Because there's nothing worse than having. If someone gets sick and we all get a cold, then we go, how the hell did that happen? Well, that's not good for the participants, not good for the institutions. And right now, when you get newer entrants coming in, I'm not saying they're skirting the process. I'm not saying Kelsey skirting the process. But when you say you have CFTC approved products, let's make sure that the, the public understands what they are. They are CFTC products that have not been objected to. Yeah, there's a difference there. And I don't know if the, the end user understands that, that's all. My point was.
- [34:15]
Tracy Alloway
Treasury futures are a huge part of your business. And I know you've been critical of Howard Lutnick's new effort to set up his own sort of offering there. What exactly are the issues that you see there? And I guess what can the CME do possibly to become more competitive in that space against. You know, you haven't had that many competitors before.
- [34:34]
Terry Duffy
Got a lot of competitors throughout the years and there's such a thing called efficiencies in the marketplace, Tracy, that capital intensive worlds that we live in today because of a whole host of rules going back from Dodd Frank into other Basel rules and things of that nature for the banks we create today around $60 billion a day of efficiencies for our market participants every single day. And in my interest rate area, it's $24 billion a day of market particip efficiencies. That's money freed up that the largest participants in the world can use it for other areas. They don't have to park it with me to be in compliance anymore because I created those margin offsets for them. I think that's really important going forward. So the other part of your question was Lutnick. Lutnick. Oh, okay. So I don't have an issue. Listen, he's a treasure. He's a Commerce Secretary. His offering. My concern with his offering is the following and I'll say it a hundred times. They are clearing that US treasury futures contract in the UK under UK law. In the United States, the law states that if you clear a cash treasury, which is under the new law coming up under the cash, the treasury clearing mandate rules that it's an SEC single regulatory mandate, meaning you, you go wherever you want, but the SEC is going to regulate you. My concern was that futures expire into cash. So what's the difference between a future and the cash market? Once expiration happens on the future, why wouldn't you treat them the same? And why would you allow UK law and UK bankruptcy to let us participants in our foreign sovereign debt? There's $27 trillion of US treasuries outstanding today. If we have a problem like we saw in London with the metals market of nickel, where they busted the trades, they didn't do a risk management, they just busted the trades, which left people hanging. What's to say that the bank of England doesn't do that with the US treasury market? If in fact somebody has an issue and if they have an issue with that. What's to say that that part of the market that they did that on doesn't have a bigger impact on the US Market. So my issue is the US like every other country in the world, should have the laws of its foreign sovereign debt be by the laws of that nation. And we don't have that in this particular situation. Every other country in the world has the laws of their country applied to their sovereign debt, except the United States on futures. And they can say, well, it's a derivative. No, it's a derivative. It's a derivative that turns into the cash product. That's exactly what you're trying to protect. So that's my argument. I told Mr. Lutnick, I told Congress, I told every regulator in the world, if he wants to put that offering in the United States, let's go. I want to compete with him, and.
- [37:37]
Tracy Alloway
I'm good at going to London. Do you have a good sense of that?
- [37:40]
Terry Duffy
Why?
- [37:40]
Tracy Alloway
Yeah, why?
- [37:40]
Terry Duffy
Because they believe that the swap, dollar swaps market, that's in London, which is completely different than futures, dollar swaps, is fixed versus floating. It is not issued by the United States government. Treasury contracts are issued by the government. Futures, like I said, turn into the cash. So they believe that because there's a large pool of dollar swaps being cleared at London Clearinghouse, the offsets will be greater than cme.
- [38:05]
Tracy Alloway
Oh, I see.
- [38:05]
Terry Duffy
But that's not the case because I just explained to you that we give $24 billion a day in efficiencies in our interest, say, complex. The only way that that larger pool of swaps would be relevant in creating a better offering is if they had any futures volume. You have to have the futures volume. We have 100% of the futures volume here at CME. And for every one of those futures contracts, we have a swap, a dollar swap at CME that offsets it. And if we didn't, then that would be a problem. So the question is, if you're sitting at a dealer anywhere around the world and you're holding U.S. futures and you can save the capital of an offset with your swap, are you going to put it at lch? Because they're nice guys, are you going to put it at CME to be part of that $24 billion? Because it's growing. My point is the futures has to grow in order to get the larger pool of the swaps offsets. And right now, for every swap contract that's out there gets the offsets against my futures products. Today, we're not Missing out on anything. So his offering is a charade game of saying, look how big that is. Okay, it's big, but no one needs it right now. The futures market is what it is right now. It's big, but we have the swaps to give the offsets. Does that make sense to you?
- [39:17]
Tracy Alloway
It does.
- [39:18]
Terry Duffy
That's his offering.
- [39:18]
Tracy Alloway
Yeah. We got to get you on stage debating Lutnick at some point. That would be great.
- [39:23]
Terry Duffy
Yeah. Well, I can't standing bad right now. I'll wait till he's done, then we can do it.
- [39:28]
Joe Weisenthal
Well, you didn't say anything about it. I was not expecting earlier to. To hear you give a little bit of a hat tip to Sam Bankman Fried. But there's another thing, and actually Sam Bankman Fried was one of the main advocate or sort of pushers of it, this thing that emerged out of the crypto world of perpetual futures. And could they apply? Could we have oil perps? Is there any reason this model, rather than oil, it's like the December future, the January or the 2028 future. Is there any reason that this tool, I guess, product, whatever it is that sort of emerged out of crypto couldn't eventually be applied to all of these legacy asset classes?
- [40:07]
Terry Duffy
It's against the act. The, the a futures contract.
- [40:11]
Joe Weisenthal
Yeah.
- [40:12]
Terry Duffy
Is defined as a product that is to be price determined at a later date.
- [40:19]
Joe Weisenthal
Okay.
- [40:19]
Terry Duffy
It doesn't say it will be in. You have to have a HAHA test right on that. So a 50 year perp is not a later date. So that would cause that's a joke.
- [40:30]
Joe Weisenthal
When you say the HAHA test.
- [40:31]
Terry Duffy
Yeah.
- [40:32]
Joe Weisenthal
That would be like if you created.
- [40:34]
Terry Duffy
A 50 year perpetual.
- [40:35]
Joe Weisenthal
Yeah.
- [40:36]
Terry Duffy
Which some of these people are doing in Europe and others.
- [40:38]
Joe Weisenthal
Yeah.
- [40:39]
Terry Duffy
They say, well, they're perpetuals, but they'll do something. 50 years. Okay. That's not the, that's not the definition by law.
- [40:47]
Joe Weisenthal
If the law were to be changed in the US would you see that as a innovation that could be useful for these markets that you trade?
- [40:54]
Terry Duffy
There are certain markets that could never become perpetuals, and there's a reason for that. So let's talk about what those are. If you have a perpetual livestock or grain market, how in the world am I going to make or take delivery on something that never expires?
- [41:09]
Tracy Alloway
Immortal cows.
- [41:10]
Terry Duffy
Right. How am I going to make or take delivery on the food markets of the United States, which is very integral into pricing of these. So deliverable products. What else is deliverable? The United States treasury market is deliverable. Right.
- [41:24]
Joe Weisenthal
Because they expire Each they expire.
- [41:26]
Terry Duffy
So my point is a perpetual would not work in deliverable products. So you say, well, what about cash settled products, Terry? Would that work? I don't know if they would work. The index would continue to go. But again, it would not fit the definition under the law of a futures contract. Because whether it's cash settled or physical settled, the definition is the exact same thing for a futures contract and it's not the perpetual definition.
- [41:51]
Tracy Alloway
Let's talk some more general macro, I guess. And we, we touched on treasury futures earlier, which again, big part of your business. There's talk of another potential government shutdown. I'm very curious how you think about that. How much of your time you spend thinking about that possibility and what it means for CME Risk Management, or is it the case that we've been here so many times before, you kind of know know what the playbook is.
- [42:13]
Terry Duffy
You always think you know what the playbook is to some extent, Tracy. But again, I think that if you the one time that you apply that strategy and you go, whoops, what do you mean it happened, you know, that's a problem. Right. So you always have to be prepared. And we are. I think if there is a shutdown, which I think there very likely could be, I don't think it's going to be the shutdown that is going to be a disturbance to the economy. I think it's going to be a disturbance to parks and recreations. It's going to be some of the other disturbances, which this is where it bothers me. Social services, you know, that's a problem. But what does that mean for the financial system? Not so sure. But you know, people's Social Security checks getting out on time, does that get delayed? That's a problem.
- [42:57]
Joe Weisenthal
Economic data getting reported.
- [42:59]
Terry Duffy
I think that when you look at they've always kind of carved that economic data out.
- [43:04]
Joe Weisenthal
Okay. Yeah.
- [43:04]
Terry Duffy
With the USDA and other entities, they've always gotten the data out through past shutdowns. And I do think that the pressure to reopen the government will be immense from both sides of the aisle. So they will have to come to it. Even if it's a short shutdown, I don't see it being a long one because of the reasons the social services that are so important to so many constituents of Congress need to have happened.
- [43:30]
Joe Weisenthal
You know, this actually reminds me going back to the different the varieties of event markets and we talked about the political risks, which I find very compelling, especially at the small elections. There are other things that are traded on event markets that to my mind, a hedger with a sort of economic stake might want to hedge. So portfolio manager who might be worried, well, what if we get a super weak jobs print? That could really bust my trade. On these other prediction markets you can bet, is it going to be over 150? Is it going to be over 200? Is it going to be below 100? You could also maybe someone who's very bullish Tesla for their robots division is bearish on the cars. So I'm going to go long Tesla, but I want to short the prediction market on their volume, car sales, et cetera. These are different than the politics ones in the sense that they're not as easy manipulable. There's something else. How do you feel like there seems to be some. It strikes me that there could be a real economic justification for the existence of these event markets.
- [44:31]
Terry Duffy
Again, Joe, I'm not going to disagree with what you just said because I think that the more risk management tools we have is better. What you just described was risk management. You did not describe a gaming type scenario. You described a company of Tesla that has multiple divisions that you like one but you're a little worried about the production of their cars. So it happens every single day and it's been going on in the market for a hundred years called paratrading. So you sell this and buy that, right, because you're not quite sure when the event's gonna happen. But you know, it's all spread it up a little bit.
- [45:03]
Joe Weisenthal
It just seems to me that there's this proliferation of possible tradable events now in part because of these new platforms. So you know, when we think about hedging risk, maybe a big insurer wanted to hedge out some interest rate risk or something that makes sense. But these new platforms are offering very specific things like bet on the car sales number or bet on the jobs number, etc. Is that a space that you could see? Again, it's a risk management. They could see me get into events such as that.
- [45:30]
Terry Duffy
Again, I think when you look at specific events that you just outlined, I'll use Tesla sure. To your example. I would have to see what the interest is by the participants because if you get a contract that you list, whether it's a prediction market or a standardized contract and no one wants to trade it, then it's an irrelevant contract anyway. So I like to say that. And boy, I hope the people in Maine don't hate me because I've used this example a few times. There's people in Maine that think you should have a lobster futures contract? Right. But you know who wants that? People that are in the lobster business. The rest of the world doesn't care about that because we can't afford lobster and we can, we just pay for it, whatever the price is. So there really isn't a marketplace there for the speculators to participate in. So is that the same situation with what you outline? I'm not suggesting it is, but that's up to the participants. That's why we're very careful not to put out products that we think that there's no demand for. We, we research with massive constituents about what they think they need in order to manage risk. And we're hearing different things now. Does a product come out like a prediction market where everybody goes, aha, I finally found the holy grail on how to lay off my risk. I don't see it. I think the prediction markets that'll be listed will be driven by the demand of the participants, not the market itself. Does that make sense to you?
- [46:52]
Joe Weisenthal
Yeah, very interesting.
- [46:54]
Tracy Alloway
I really want to launch a lobster prediction market now. Lobster price prediction. I think that'd be a really interesting experiment.
- [47:00]
Joe Weisenthal
There used to be a cardamom futures that was traded in India. And I tried reaching out to the regulation regulator. I wanted to do a story about a dead futures contract that didn't, I couldn't get in. I gotta try again because we should try again. Yeah, I'd love to like the story of a futures contract that just lost.
- [47:14]
Tracy Alloway
Yeah, yeah, sort of. On this note, do you see any indication of big institutional investors? I guess taking some of the strategies that are deployed by retail or sort of imitating retail in some way. And what I mean by that is I think about one day zero day options. When those first gained traction, a lot of the activity was through retail and, and then the institutional sort of got pulled in and got really into it. Is there evidence of institutional becoming more like retail in certain patterns of behavior or certain interest in certain products?
- [47:46]
Terry Duffy
Well, I think there is always an opportunity for big institutions to look at what the retail is doing. So let's be mindful of where the money comes from, from institutions. So if you put together a pool of dollars and you give it to a large institution, they call it institutional money. That probably came from a subset of the teachers union of a lot of people. So everybody's got $10 and this, all of a sudden it's worth a hundred million dollars or a billion dollars, whatever the case is. So that retail money that's now big is now called institutional money. So their thought processes aren't too dissimilar from their clients. So yes, I can see that going back and forth, ebbing and flowing about the ideas of what they want to participate in or not. First of all, I think people are always looking for opportunity. I think they're always looking for efficiencies. And I think that the lines of institutional and retail are absolutely blurred right now. And I think there's a lot of people going, what does that mean? I feel like I've got some kind of handle on that and that's why I'm doing what I'm doing, because I think that those blurred lines will continue to, to go forward and the products that they participate in and how they do it will continue to get blurred. I think both can grow and they'll grow exponentially, but they're going to look a lot alike.
- [49:05]
Joe Weisenthal
I just have one last question and I feel compelled to ask every CEO or really every corporate executive this these days, with the exception of your software engineers who work at CME right now, is there anything that you can point to where large language models are being deployed in a productive way within here, or is it still at test and see and do experiments?
- [49:30]
Terry Duffy
Okay, so let me see if I can answer that one. So large language models being deployed.
- [49:36]
Joe Weisenthal
Yeah, I'm sure the engineers are generating codes.
- [49:38]
Terry Duffy
Yeah, there's no question. But see, we're kind of in a bit of a limbo, for lack of a better term spot right now because a lot of that stuff that I'm working on is going through Google right now because of the relationship and the partnership I have with Google. I'm transitioning. I'm going to transition my markets to Google Cloud, I'm transitioning a lot of my tech to Google Cloud and a lot of that machine learning and things of that nature, Gemini and all that, we're going through Google, so we are doing it together. So it's not just my people doing it anymore, it's CME and Google working together to deploy that. So I can't give you a singular answer, but what we're doing at cme, because it's a, it's a mix between.
- [50:16]
Joe Weisenthal
Us at the moment. There's no workflow that exists where someone could point and say, you know what, this used to be a 10 person job, but thanks to large language models, it's a one person job. At least as of 9-25-25, the only.
- [50:31]
Terry Duffy
Way I can answer that is by headcount.
- [50:32]
Joe Weisenthal
Okay.
- [50:33]
Terry Duffy
And I would Say that that is not the case because one of the things that I've seen with technology is it creates other jobs.
- [50:39]
Joe Weisenthal
Yeah.
- [50:39]
Terry Duffy
And it eliminates the last job. So, yes, we have seen the elimination of certain things to your point, but it's created other ones. So I look at it as headcount, not so much as project related.
- [50:49]
Tracy Alloway
Spoken like a former pit trader who became the CEO of a very large derivatives exchange. Can I squeeze in one more question? This is backward looking, but I am very interested in hearing about it. Liberation Day, huge amount of market volatility. What was that like for you?
- [51:07]
Terry Duffy
You know, just another day. To be honest with you. I hate to say it that way, but we've seen so many different events in my career that, you know, when you go back to the 08 crisis, you go back to the flash crash, you go back to other scenarios. The pandemic. You know, I look at the pandemic as one of the more frightening times in the history of markets versus Liberation Day. Liberation Day is more about what are the tariffs going to mean or not mean. And, you know, I think there's a lot of people that believe that there's no way that these could come to fruition. So it was kind of tempered down a little bit. The activity was pretty exciting, but if that were to come out of the blue, it would be really bizarre. But I think that was fairly well telegraphed, Tracy, to say the least. Liberation Day. So I think the market was well prepared for it. It reminds me a lot of last week with the Fed. That was the most telegraphed quarter point move in the history of the Federal Reserve. Right. Is that fair? I think Liberation Day, 9,5% moves in.
- [52:06]
Joe Weisenthal
The stock market in a row.
- [52:08]
Terry Duffy
Okay, so when you look at percent of stock market moves at the levels that we're at today versus the percent of the levels that we're at in 08, it's a non event. So if we had 8, everything based.
- [52:21]
Tracy Alloway
By 2008 is a non event.
- [52:23]
Joe Weisenthal
That therefore is all for price anyway.
- [52:24]
Terry Duffy
So I think it's relative to the value of the product and the percent goes with it.
- [52:29]
Tracy Alloway
What would worry you now?
- [52:31]
Terry Duffy
Everything worries me.
- [52:32]
Tracy Alloway
Oh, okay.
- [52:32]
Terry Duffy
So I don't have one particular thing, so you could say anything and I'd say, yep, that worries me. So. But I, I try to manage it and, and move forward. And I, I like to be, you know, telling my people a couple different things. I, I love looking for, I love the future. I love young people. I think they're innovative, I think they're opportunities Galore going forward. And I like to use my past as something that I learned from, but not live in it. So I don't like to look through the rearview mirror. I like to look through the windshield and go forward. But when you do that, you know, there's a lot of things that can scare you. We talked about them earlier today. Some of the new innovations that are coming out, some will win, some will fail. So you have to be very careful about how we participate in that as an institution like cme. So a lot of that concerns me no different than when Sam was, you know, putting forth with FTX back in the day, and he was backing up his coins with synthetic other coins. And then he wanted to have a margining system with no risk management that was fraught with danger. And I saw that, but it seemed like nobody else did. I'm not suggesting that's today's world, but there seems to be a situation right now with regulatory issues where, you know, go ahead and do it and we'll apologize later is the old saying, whatever it is, and, and that's not a good place to be. So that worries me a little bit, Tracy.
- [53:49]
Tracy Alloway
All right. Terry Duffy, always good chatting with you. Thank you so much for coming back on the show.
- [53:53]
Terry Duffy
Thanks, Tracy. Thanks, Joe.
- [53:55]
Joe Weisenthal
That was a blast. Thank you so much.
- [53:56]
Tracy Alloway
So much fun, Joe. Terry's a blast.
- [54:11]
Joe Weisenthal
I love talking to Terry.
- [54:12]
Tracy Alloway
Yeah, I'm glad we did it, though, because I think if you're thinking about the intersection of the sort of prediction betting markets and the sort of old school traditional markets, the cme, you know, kind of stands out.
- [54:25]
Joe Weisenthal
It's right there. Yeah, I thought, I really, I really liked his point. About 2017 was by some, by many measures, very late to the crypto game. Maybe. I mean, I guess we don't know. In 100 years from now, maybe that'll still be seen as day one, but it's been a successful business for the cme. And so this idea that the long term, you know, one way to think about the long term value creation of the CME is that it's okay to be second. That doesn't need to rush out of the gate for some of these things, I thought that was a very compelling example.
- [54:57]
Tracy Alloway
Right. And there, you know, there is first mover advantage, but on the other hand, there is also institutional strength that can be an advantage as well.
- [55:05]
Joe Weisenthal
FTX had first mover advantage.
- [55:07]
Tracy Alloway
That's right.
- [55:08]
Joe Weisenthal
Sort of was missing the latter one. And that was proved to be very possible.
- [55:11]
Tracy Alloway
I think that was Terry's point. Right Yeah, I don't want to be super old fashioned when it comes to a lot of betting markets, but one of the things you hear is that when you think about traditional financial assets, it's about putting money to good use. Right. You know, you invest in something, you're supposed to get an income stream back or maybe an asset that appreciates over time, but again, probably one that generates some sort of income. I do, I look at the activity on all of these betting platforms and like, you know, market making platforms and things like that and I just think there's so much money being generated and I'm not sure like where it's going. Do you know what I mean?
- [55:49]
Joe Weisenthal
Yeah. There's so much going on right now and like, it just feels like there's a complete blurring of everything, a complete transformation of everything. It really does feel like to me specifically, the doors are being flung open. There is this sort of growing norm in society that anyone can trade anything at any time for better or worse and make no judgment on it. I do think, you know, it is interesting to me one, to CME specifically this sort of like caution. You know, let's take this stuff seriously. Not necessarily dismissing. On the other hand, like when CME like partners with FanDuel and which is like a literal sports betting company, it strikes me that that is an accelerating event for this world where we just trade on everything that you can talk about caution but like when you're like, you know, partnering with a straight up sports betting company, even if it's on a different app, et cetera, that you're accelerating. This world of everything is a bet on any, on any app.
- [56:51]
Tracy Alloway
On the plus side, lots of content for good, odd lots episodes.
- [56:55]
Joe Weisenthal
And one of the things. Yes. And we have many more like this is like perfect timing, this trip and everything because there is so much going on. There's that roundtable I really like Terry's point about. Even if you said it as kind of a joke about the lobster futures.
- [57:07]
Tracy Alloway
Yeah.
- [57:07]
Joe Weisenthal
Because I do think that's very telling. Right. You could imagine that lobstermen might like to hedge their prices, but that there's just not going to be enough volume or real market for it. And I do think that's interesting to keep in mind because I do look at some of these contracts that exist on the other platforms and like I could see a entity wanting to hedge out the risk of a very left tail jobs report. Or I could see wanting to hedge out the car sales risk of Tesla. The logic of the market does not necessarily mean that there will be a sizable market I think is a very important one to keep in mind.
- [57:41]
Tracy Alloway
But I also wonder if you wouldn't have the same market size issues for something like a lobster prediction market. Like who? Well.
- [57:48]
Joe Weisenthal
Well, yeah. I mean, we don't know.
- [57:50]
Tracy Alloway
No, no, no. It just throws up all these really interesting questions, and I do think maybe we should start one and then talk about what we learned from it.
- [57:58]
Joe Weisenthal
Let's do it.
- [57:58]
Tracy Alloway
Okay. The next Odd Lot series. Shall we Leave it There.
- [58:00]
Joe Weisenthal
Let's leave it there.
- [58:02]
Tracy Alloway
This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.
- [58:07]
Joe Weisenthal
And I'm Joe Wiesenthal. You can follow me at the Stalwart. Follow our producers, Carmen Rodriguez at carmenarmon, Dashiell Bennett at dashbot, and Cale Brooks at Kalebrooks. For more Odd Lots content, go to bloomberg.com oddlots we have a daily newsletter and all of our episodes. You can chat about all of these topics 24. 7 in our Discord, Discord, GG odds.
- [58:27]
Tracy Alloway
Lots and if you enjoy Odd Lots, if you like it. When we come to Chicago to talk trading, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.
- [58:53]
Terry Duffy
Sa.