CME Group Slides to 235th in Trading Volume as It Bets on Prediction Markets with FanDuel Partnership

On August 21, 2025, CME Group (CME) traded down 0.47% as trading volume fell to $360 million, a 23.95% decline from the prior day’s activity, ranking it 235th in market volume. The derivative exchange’s recent strategic moves are drawing attention amid a broader shift in retail trading dynamics.

CME announced a partnership with FanDuel, a Flutter Entertainment subsidiary, to launch event-based contracts tied to financial benchmarks, commodities, and economic indicators. These contracts, accessible via FanDuel’s app, will allow users to take “yes” or “no” positions on outcomes such as S&P 500 movements, oil prices, and inflation metrics. The initiative leverages CME’s regulatory framework and aims to position the exchange as a leader in prediction markets, which have seen growing retail interest amid evolving regulatory environments.

The collaboration reflects CME’s broader strategy to expand its retail reach, including recent product launches on Robinhood and micro-contracts for agricultural commodities. However, the prediction market space is competitive, with platforms like Kalshi and Polymarket already offering similar products. Regulatory scrutiny remains a key factor, as the Biden administration previously curtailed sports and politics-themed derivatives, while the Trump-era policies were more accommodating. The joint venture requires CFTC approval, underscoring the importance of compliance in this sector.

CME’s role as a futures commission merchant (FCM) in the partnership highlights its infrastructure capabilities, having secured FCM approval in 2024. This move aligns with the exchange’s goal to attract a new generation of traders by simplifying access to derivative products. The partnership’s success could reshape the intersection of sports betting and financial markets, though challenges from state-level restrictions on platforms like Kalshi may persist.

The backtest results for a strategy involving the top 500 stocks by daily volume from 2022 to 2025 showed a 1-day return of 1.98%, with a total return of 7.61% over 365 days. The strategy’s Sharpe ratio of 0.94 indicated favorable risk-adjusted performance, though a maximum drawdown of -29.16% highlighted its vulnerability during market downturns.