CME Group's Duffy Goes on Offensive Against Perpetual Futures While Unveiling Novel Compute Contract Tied to Nvidia GPU Pricing
Q2 2026 earnings call, July 22, 2026
CME Group used its second-quarter earnings call to mount an unusually aggressive defense of its franchise against the perpetual futures threat that has dominated market chatter in recent months, while simultaneously revealing new details on a Compute futures product that will track Nvidia H100 GPU rental rates, a novel instrument tying the exchange operator directly to the AI infrastructure buildout. Chairman and CEO Terry Duffy spent much of the call systematically dismantling the bull case for perpetuals cannibalizing CME's institutional business, while also confirming litigation timelines against the CFTC and addressing a regulatory stay on its 24/7 crude oil contract that Duffy said was granted inconsistently relative to other approved products.
Duffy's Perpetual Futures Rebuttal: "They Do Not Want This Product"
The most detailed section of the call centered on perpetual futures, which Duffy addressed unprompted in his opening remarks before fielding no fewer than four separate analyst questions on the topic. His argument rested on three legs: perpetuals are legally swaps, not futures, they are structurally unsuited to institutional hedging, and the economics simply do not work for CME's core client base, which Duffy said accounted for 94% of volume in the first half of 2026.
Duffy described personally canvassing top-tier institutional clients across asset classes to test demand. "I have had conversations with the CEO of this firm and his derivative participants from different parts of the world, and they reassured me 19 times that I asked them if they wanted me to list this product. They do not want this product," he said, referencing what he called the world's second-largest energy commercial participant. He extended the same characterization to conversations in rates and equities.
On the swap classification, Duffy leaned on his own regulatory history: "Any time two parties exchange payments like they do in the funding rate under the Dodd-Frank Act, which I had the distinct pleasure of testifying 20 to 30 times on in 2010, long before anybody at the CFTC was there... that is a swap contract." That distinction matters commercially, he argued, because swaps require five-day margining and swap-dealer registration, a bar retail participants are unlikely to clear, effectively insulating CME's retail-facing single stock and equity index businesses from direct perpetual competition even if the products proliferate elsewhere.
Chief Financial Officer Lynne Fitzpatrick and Global Head of Financial and OTC Products Tim McCourt backed up the rhetoric with data. CME's cryptocurrency futures and options complex grew 44% in the first half of 2026 versus the first half of 2025, and 76% in June year-over-year, despite the debut of a Kalshi bitcoin perpetual in that window. McCourt drew a stark contrast in scale: CME trades $4.5 billion to $6.5 billion daily across its crypto complex versus roughly $270 million per day at Kalshi's bitcoin perp in July, with CME's average daily open interest of $9 billion to $10 billion dwarfing the perp product's roughly $10 million.
Asked by Deutsche Bank's Brian Bedell about a hypothetical equity perpetual on the S&P 500, Duffy was blunt about systemic risk. "I think it could be a systemic issue for the marketplace because no one understands full well how that funding rate would work and how it would be calculated... And if we have a systemic risk to the U.S. equity market, there's a systemic risk to the world." He also confirmed CME holds exclusive rights under its licensing agreements with S&P Global, Dow Jones, Nasdaq and Russell to list any product on those indices that is legally classified as a future, perpetual or otherwise, effectively closing that door to competitors absent a reclassification fight.
Regulatory Friction: CFTC Stays Oil Contract, Waves Through Hot Dog Futures
Piper Sandler's Patrick Moley pressed Duffy on the CFTC's decision to stay CME's 24/7 crude oil contract days before launch while allowing its 24/7 gold contract to proceed. Duffy's response was pointed and, at moments, sardonic. He noted CME filed under both the self-certification (40.2) and full-review (40.3) pathways for the oil product and viewed the self-certification as appropriate since the contract was "not novel or complex," merely an existing product at smaller size.
He then contrasted the stay with the commission's treatment of a Kalshi product tied to Nathan's Hot Dog Eating Contest, which cleared 40.2 review without issue. "That to me is a little concerning about readily manipulable, susceptible to manipulation under Core Principle 3," Duffy said, adding he was "surprised... but I guess I shouldn't be because there's certain other contracts that take priority when you're in the hot dog business." He also flagged an unresolved question of how regulators police U.S. participation in existing 24/7 crypto-oil perpetual products and prediction-market oil contracts that already trade around the clock, suggesting an inconsistency in how the agency applies its own rules across product types.
On the broader CFTC litigation over perpetuals' classification, Duffy confirmed the case has an assigned judge, with the agency's response due within 60 days, placing the next milestone in late August. He cautioned there is no further visibility beyond that procedural step at this stage.
Compute Futures: A New Risk Management Product for the AI Buildout
In a genuinely new disclosure, Global Head of Commodities Derek Sammann detailed CME's forthcoming Compute futures product, developed in partnership with Silicon Data, which will serve as the price reporting agency. The contract will be, in Sammann's words, "the first daily benchmark tracking the spot hourly rental cost of Nvidia H100 GPUs," giving data center operators, AI labs, cloud providers and financiers a price discovery and hedging mechanism that does not currently exist in any organized market.
Sammann framed the product as a natural extension of CME's existing commodities complex, given the exchange already lists copper, aluminum, natural gas and power contracts, all core inputs to data center economics. "This allows customers to effectively hedge a data center," he said, positioning the product for commercial end users as well as asset managers and hedge funds seeking synthetic exposure to AI infrastructure growth without holding the underlying equities. No specific launch date was given beyond "later this year," and no volume or open-interest targets were disclosed, leaving the near-term revenue contribution uncertain.
Single Stock Futures Relaunch and Retail Distribution Build-Out
CME will relaunch single stock futures next week, a product that failed in its earlier incarnation as the OneChicago joint venture in the early 2000s. Duffy attributed that failure to poor timing and a fragmented three-party ownership structure spanning two regulators, and argued conditions have since shifted given elevated equity valuations and concentrated single-name risk in mega-cap names. Tim McCourt said the new contracts will be financially settled against closing prices, a structural change designed to make them more accessible globally and easier to integrate for distribution partners, and pointed to equity complex momentum as supporting evidence, with June average daily volume up 54% year-over-year and July tracking 40% to 50% above the prior year.
Global Head of Client Development and Sales Julie Winkler said more than 35 retail brokerage partners are targeting day-one readiness, and characterized the product internally as "the single biggest retail growth catalyst of the year." Whether that translates into durable volume, given the prior product's failure and the crowded retail leverage landscape, remains to be proven.
Financial Results: Record Market Data, Volume Momentum Into Q3
Underlying the strategic discussion, CME posted second-quarter revenue of $1.7 billion, up 1% year-over-year and a Q2 record, with adjusted diluted earnings per share of $2.99, also up 1%. Market data revenue hit a record $238 million, up 20% year-over-year, marking the 33rd consecutive quarter of year-over-year growth in that line. Fitzpatrick attributed the market data strength to January's price increase, 3.5% sequential growth in professional subscribers, and a 56% year-over-year jump in simulated trading accounts that Winkler described as an incubator funneling users toward paid data subscriptions. The quarter also included $7 million in one-time audit and catch-up payments, up from $3.8 million in the prior quarter, a detail investors should strip out when modeling the data business's recurring run rate.
Average daily volume of 29.8 million contracts was within 1% of the prior-year Q2 record, while open interest was up 8% year-over-year and 16% since the start of 2026. Management flagged July volumes tracking 18% ahead of last year, a strong signal heading into the third quarter. The company returned $1.2 billion to shareholders in the quarter, split between $468 million in dividends and $695 million in buybacks.
Prediction Markets Still Small, Sports Contracts Explicitly Disavowed
Fitzpatrick disclosed that CME has processed roughly 525 million event contracts since launch, with only about 48 million, or 9% of the total, tied to economic and market events rather than sports. Average daily volume in the category reached over 4 million contracts, up 40% versus the first quarter, with more than 140,000 active accounts, up 13% sequentially. Duffy was notably dismissive of sports-related prediction contracts offered elsewhere in the market, stating plainly that "a lot of these prediction markets on sports are gambling" and predicting the legal question will eventually reach the Supreme Court, a signal CME has no near-term intention of competing in that segment. Fitzpatrick added that monetizing prediction market data remains premature given current volume levels.
Other Product Pipeline: Treasury Link, Metals, and Vertical Integration Risk
Global Head of Rates Michael Dennis confirmed Treasury Link, a new mechanism linking Treasury futures with BrokerTec cash Treasury liquidity using CME's existing FX Link technology, remains on track for a fourth-quarter 2026 launch, targeting atomic execution between cash and futures markets to eliminate legging risk. On metals, Sammann tied recent strength, including record physical copper inventories of nearly 700,000 short tons in COMEX warehouses and record open interest in steel, to the Trump administration's Project Vault initiative around critical minerals supply chains, though he stopped short of quantifying a specific revenue contribution.
Asked about the risk of vertically integrated venues that combine customer relationships with trading infrastructure, Duffy acknowledged the model as a competitive and conflict-of-interest concern but framed it as a potential feeder system for CME's own retail growth over time, rather than a purely defensive issue, while confirming CME maintains its own FCM as a hedge against structural shifts in market plumbing following the FTX collapse.