Traders Are Getting a New Tool to Wager on the Biggest US Stocks - Yahoo Finance

What the report says

Bloomberg, in a report carried by Yahoo Finance, says CME Group is preparing to introduce single-stock futures on Monday, giving traders a new way to take positions tied to major U.S. companies without buying or selling the shares themselves. The contracts will cover more than 50 large companies, with examples in the report including Nvidia, Micron, Pfizer and Walmart, and will be settled in cash based on the underlying stock’s closing price.

CME is pitching the product as a leveraged but more straightforward alternative to options, which require traders to understand pricing factors such as volatility and time decay. The exchange is seeking both retail and institutional users, and Tim McCourt, CME’s global head of equities, FX and alternative products, told Bloomberg the launch could draw new participants into CME’s markets. The contracts are expected to trade 23 hours a day, five days a week, and will come in standard versions linked to 100 shares and smaller micro contracts tied to 10 shares.

The move revives a product with a difficult U.S. history. Bloomberg notes that single-stock futures were barred for years, permitted under rules approved in 2002, and later disappeared after failing to build enough trading interest. CME Chairman and CEO Terry Duffy acknowledged on a recent earnings call that the earlier effort performed poorly, while arguing that markets have changed since then.

The launch matters because it could expand leveraged stock-linked trading at a time of active retail participation, constrained access to some high-demand listings and competition among exchanges. Bloomberg also cautions that risks remain, including potentially volatile trading outside normal stock-market hours and commission costs that futures traders often face.