A $93 trillion trading boom puts CME in an unusual spot

A $93 trillion trading boom puts CME in an unusual spot

Faizan Farooque

Sun, September 13, 2026 at 7:03 PM GMT+3 5 min read

CME Group (CME) is suing its own regulator over a product that could threaten parts of its futures empire. But Bank of America (BAC) thinks the fight could do surprisingly well for derivatives exchanges, even if CME loses.

The dispute centers on perpetual futures, or perps. Perpetual contracts don't expire, making them easy for traders to leverage exposure without rolling into new contracts.

The product has already launched internationally. Bank of America believes crypto perpetual trading will reach over $93 trillion in 2025, almost five times the size of the underlying crypto spot market.

Now, the Commodity Futures Trading Commission (CFTC) accepted KalshiEX's bitcoin perpetual contract as a futures contract on May 29. The regulator also noted that it should evaluate perpetual products linked to other asset classes on a case-by-case basis.

Less than three weeks later, CME filed suit. Bank of America said CME might do well winning, losing, or just slowing down the regulatory process.

CME lawsuit creates an unusual win-win setup

CME sued the CFTC on June 18 to classify perpetual contracts as swaps, not futures.

This distinction is of considerable commercial importance. If CME wins, perps could be subject to swap-dealer registration, extra reporting requirements, business-conduct rules, and stricter margin standards, according to Bank of America. Such burdens could make it harder to offer the contracts and less attractive to traders.

Related: Billionaire investor makes Amazon his biggest stock bet

But losing might give Bank of America another edge, the bank says. CME has exclusive futures license agreements for key stock indexes such as the S&P 500, Nasdaq-100, and Russell 2000. If perps still count as futures, rivals may find it hard to create contracts directly linked to such indices.

Competitors may create their own benchmarks to rival them, but it will not necessarily be simple to lure liquidity away from existing indexes. Regulators might also be forced to reexamine their approval procedure by a procedural court order, holding up new products without firmly deciding whether perps are futures or swaps.

That's why Bank of America says the setup is advantageous for CME in a few situations.

The bank doesn't like the stock overall. This report rates CME Underperform with a $230 price target, compared to its Sept. 10 $274.70 share price. Instead of expecting perps to destroy CME's business, its caution reflects valuation and slower expected earnings growth.

A $93 trillion market explains why exchanges are worried

The offshore market is why U.S. exchanges are taking the product seriously.

CoinGecko estimates centralized perpetual exchanges generated $86.2 trillion in 2025 trading volume, up 47.4% from the prior year. Decentralized perpetual exchanges added another $6.7 trillion, putting combined volume at roughly $92.9 trillion.

Their appeal is straightforward. Traditional futures expire and may be rolled forward, but options require strike prices and expiration dates. Active retail traders like perpetuals because they don't expire and offer leverage.

That leverage is risky. A 10% move against a position in the underlying security with a 10-times leveraged trader might wipe out a margin position, according to Bank of America.

The main concern for exchange investors is whether the offering can leap from crypto to stocks. Bank of America sees bitcoin and equities as the best potential sources of U.S. retail demand.

Cboe faces more risk, while ICE plays both sides

CBOE Global Markets (CBOE) might see further upheaval if perpetuals go into stocks, as retail has helped fuel growth in its options franchise.

Bank of America said there is some overlap between perpetual traders and users of S&P 500 zero-days-to-expiration, or 0DTE, options. Both provide significant leverage, but perps might be simpler for certain traders since there are no strike prices or expirations to choose.

But the bank believes investors overreacted when Cboe's stock price plunged about 30% between May 15 and June 30. Options give nonlinear exposure and enable institutional hedging tactics that a basic perpetual contract cannot simply replace. Bank of America ranks Cboe Neutral with a $354 price target.

More Manager Buy/Sells:

Intercontinental Exchange (ICE) seems more insulated. Bank of America estimates that around 95% of ICE's exchange income comes from institutional clients. Commodity and rates users generally want capabilities such as physical settlement, particular dates, and hedge-accounting treatment.

ICE has also positioned itself to gain if innovative trading mechanisms take off. The corporation invested in crypto platform OKX in March at a $25 billion value and stated the companies will work together on sectors like regulated crypto futures, clearing, and digital-asset infrastructure.

Bank of America therefore names ICE its top exchange pick, with a Buy rating and $232 price target.

Perpetual futures put CME in an unusual position

The U.S. perp market is still modest compared to offshore trade, and authorities have not yet allowed perps outside of crypto. That remains a serious question about whether the product will acquire major momentum in stocks and other conventional markets.

But not everyone shares the danger of competition equally. If stock perps take off, some of the speculative retail action could migrate to Cboe. ICE has a strong institutional client base, and investment in OKX gives it safety and possible upside.

CME is in the oddest situation. If it wins its case, tighter swap requirements might apply to perpetual goods. Should it lose, the exclusive index ties could protect some of its most valuable businesses. A protracted court battle might potentially delay rivals seeking clearance for new contracts.

Perpetual futures have previously shown that retail traders would choose a simpler leveraged instrument when given the opportunity. Whether they can duplicate that performance in U.S. stocks remains to be seen.

But Bank of America's main point is refreshingly straightforward: CME doesn't need to win in court to be the winner.

Related: Bank of America flags a $163B risk hanging over stocks

This story was originally published by TheStreet on Sep 13, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.