Animal Spirits Podcast - Talk Your Book: How to Invest in Futures

Episode Date: August 18, 2025

On this episode of Animal Spirits: Talk Your Book, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Craig Bewick, Head of Retail Education for the CME Group to discuss: how futures contracts work, why retail investors are becoming a bigger part of the futures market and more. Find complete show notes on our blogs... Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://idontshop.com⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by the CME Group. Go to CMEE Group.com to learn more about all of their different tools for trading futures and retail education at CMEGroop.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Redholz wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben on today's show.

We are joined by Craig Buick. Craig is the head of retail education at the CME group. And this is the first time I'm talking about that I'm talking my book because I am a shareholder in the stock because there is a massive tailwind. You can call it secular. This is a super duper growth story. The rise of the retail trader, which is not brand, brand new. But we talk about this all the time. How long have you owned this talk for?

I'm a recent shareholder, probably like two months, because it just went up every single day. And I just needed some sort of a pullback to get it and I got it and I got long. But they've been talking about this on their earnings calls. They get asked all the time because it is such a big. story of their growth, which is retail participation. And I don't think this is going to go away in a bare market. I don't think that people are going to stop using futures, whether it's for leverage purposes, which can be fun and exciting. And let's just call it what it is. That's, that's real. And then there's also, like, more practical purposes, such as hedging. We speak about

that on the show. If you've got a portfolio that you're not really interested in turning over for taxes, reasons, you're a long-term shareholder or whatever. But, But you do think that, like, all right, maybe markets have gone straight up and I want to just, you know, protect my portfolio, just buy some insurance. This is a way to do it. And, yeah, it's here to stay. So I didn't realize this stock was only down like eight and a half percent in the April swoon where the market was down 20. And a bunch of other stocks were down 30, 40, 50 percent in some cases. This stock was like a hedge against the Liberation Day sell off.

I wish I owned it then. So you're banking on the retail trading explosion. continuing. All right, because we mentioned the Barron's story before. I think we mentioned on the show, just the explosion in futures trading by retail traders and how Barron's was kind of like, I can't believe this. We talked to Craig about that. Oh, I can. This is not a flash in the pan. No, it's here to stay. Yeah. So we talked to Craig about all that stuff. We talked about how they do their education for retail traders, how futures contracts work. Michael's mind was blown by the amount of leverage you can take in these contracts. So here's our talk with Craig from CME Group.

Craig, welcome to the show. Thanks. Pleasure to be here. All right. So you guys reported your second quarter earnings report a couple of weeks ago. Why do I know that? I'm a shareholder. So this might be the first time that we've had the situation of Talk Your Book.

I'm a shareholder of the company. And one of the things that jumped out to me was the retail trader component as a tailwind to your success. So during the second. quarter, CME reported that more than 90,000 retail traders of 56% year-over-year increase traded futures for the first time, the fifth consecutive quarter of double-digit growth. SPY's not good enough? We got to trade futures.

Why are people so? Why are people so with the trade of futures? What is the appeal of a futures contract for a retail trader? Yeah, and it's a great question. And certainly, I think, our success and sort of the rise of retail futures, trading has been well documented, both in that earnings call. And even if you go back to some of the previous ones, it's not a sudden thing, right? This has been a trend. And, you know, some of that is just our increased distribution too, right? We continue to add distribution partners, big broker

dealers. I know, you know, some of that's been well documented in the press as well. We've had some high profile broker dealers begin to offer futures, which just increases the accessibility of them. But why, you know, and I don't think it's a case of spy is not good enough, right? But there are some differences in futures, some characteristics, I think, that do make them appealing to both institutions and individual traders alike. And some of those are the inherent capital efficiencies, right? And those apply to both institutions, but also to individual traders. And what I mean by that is that to hold a position, for example, in the S&P 500, since you mentioned the spy, you only have to put up, a performance, what we call a margin or performance bond in a fraction of what your actual

notional exposure is. So to hold a relatively large position, the amount of money that an individual has to put up, it's much less than what you typically would in, for example, the securities markets in a lot of cases. They're also open around the clock, right? So our futures markets, most of our futures markets opened at 5 p.m. on Sunday, Chicago time. And they're essentially open 23 hours a day until 4 p.m.

on Friday. So I think traders really like that ability to get at their position anytime day or night. Some other things is the ability to go short, right? So if you're trading spiders, you've got low, if you want to get short in a lot of securities markets, you've got a low, you've got locate requirements that you have to perform. There's borrow costs and things like that. With futures, if you want to be short, the market, you simply sell it. If you want to get long, you buy it. And it's really that simple. And then if you have less than $25,000 in your account, pattern day trading rules don't apply to futures as well.

So I want to get more into the different dynamics of trading futures and maybe comparing contrast with options. But getting back to the retail component, Barron's had a piece on CME group recently. And they said that you're starting to attract retail investors, something long thought to be nearly impossible in the futures market. And they're making it sound like it's this crazy thing. Did you have a bunch of retail investors show interest? or was this an initiative within the firm that you said, no, we're really want to target this

cohort of people who is showing interest in wanting to be involved in these different sort of strategies? Yeah, I think, you know, and just to sort of set the tone a little bit, I don't, futures trading by individuals isn't brand new, right? Even if you go all the way back to before the proliferation of online trading in the late 90s, there were futures brokers that were selling to individuals just like there were stockbrokers. So it's not like it's a brand new phenomenon. But as I said before, what's really kind of led to some of the large increases that we have is the increased accessibility of future.

So broker dealers started offering futures along with stocks to individuals. We really saw that take a jump up with all of retail trading, really, during the pandemic in 2020. I think the increase in retail trading across all asset classes, stocks, and back then cryptocurrencies, and then also futures really started to explode. And some of it that I think was the introduction of more retail-specific products like the micro equity indexes that we launched in 2019. So I think it wasn't necessarily a decision. I mean, certainly CME is committed to offering.

retail-appropriate products like the micros, and that's led to a lot of the increase that we've seen. So I think that's, you know, and I can't remember exactly what your question was now, but it wasn't really a decision as much as we provided the products that retail traders could appropriately use, and then we saw an increase from that. How do you define retail? Is it a certain dollar amount? Is it coming from, like, you know, if somebody's from.

Robinhood, they're a retail trader? Like, how do you categorize retail traders? Yeah, it's, you know, technically, I think the technical definition that we use is an individual trading his or her own account on a non-member, what we call non-member rates, right? So at CME, there's a different fee schedule if you're a member or a non-member. So that's the technical definition of a retail trader. All right. So maybe let's start at the highest level. What is a futures contract? And how does it work? Yeah, it's a great question. And it's the first slide in the Futures 101 deck that I present a lot.

And quite simply, a futures contract is simply a contract to buy or sell something, whether it's the NASDAQ100 or WTI crude oil or gold at some point in the future. But I think maybe the easiest way to describe it is to contrast it with what people might be more familiar with, which is like an equity. So if you buy a share of Apple, you own, albeit a small, part of the company with futures, it does not convey a right of ownership nor voting rights or anything like that. It's simply a contract to buy or sell some asset at some point in the future. All right. So one of the key features, as you alluded to, is capital efficiency. I'll call

it leverage. So how does that work? Obviously, this is one of the key elements is that you can get a lot for a little, but there's margin requirements. There's all sorts of things. So, like, how does it practically work? What do you get? Talk about, like, a margin call. I know there's like a million different things to unpack here. But maybe let's start there.

Sure. And you're absolutely right. The other way to say capital efficiency is inherent leverage. Futures are an inherently leveraged product. And the difference, I guess, because use the word margin. And I want to be clear about the two different contexts in which someone might hear the word margin. So in the equities world or the securities world,

A margin, if you're trading stocks on margin, that amount that you're not putting up. So, for example, if you trade, again, let's take Apple on margin and you have $1,000 worth of Apple, you might trade it on margin and put up half of that or $500. The balance of that $500 is technically a loan from your broker. In the futures world, we use the same word margin, but it's in the context of, a performance bond. So instead of a loan, that margin is really the amount that you're putting up to hold, it's a good faith deposit to hold a position. And whereas in the securities world, under what they call reg T requirements, oftentimes someone has to put up at least 50%

of the position they're holding. In futures, it's a fraction of that. So if you look at like the S&P or the NASDAQ futures, it's generally going to be around 4 to 6% of the position you're holding. So if you're holding. And then that's a double-edged sword, right? But in the micro-Nazdaq, which, you know, at today's prices, is nearly a $50,000 notional exposure with one micro-Nasdaq contract, the amount that you'd have to put up is only about five or six percent of that, or call it, let's say, $3,000. And that changes a little bit depending on volatility and stuff like that, but generally it's going to be in that four to six percent range. So Michael and I have had a number of people on the show talking about options, and there's been stories talking about the explosion of options trading.

So I think it would be helpful to kind of compare and contrast the difference between futures and options and maybe what options are better for in terms of looking for exposure versus what futures can give you in terms of exposure and kind of compare and contrast. Yeah, and to be clear, we have options on futures at CME as well. So and we've seen. Right? So it's a derivative of a derivative. So I want to be clear about that, too. And we've actually seen a significant increase in number of retail traders trading the options that we list here. As I think, as you allude, the explosion of options generally among retail traders. So, you know, I think it's one of those rising tides, right? As the retail trading population has become more aware and more interested in options, they've also discovered our options. But the difference is,

I would compare it more. If you're trading options, it's, how would I say this? So an option has a strike price. Let me actually back up. So a futures contract and an option are both derivative products. And I think, Ben, you were asking me more about options on stocks and the difference between those and futures. And I would say it's more like if you're trading, if you want straight, long or short exposure to the S&P, the e-mini or micro E-mini S&P future is going to be tantamount to that spider stock, right? You're going to have what we call a delta of one.

So the price is going to go up or it's going to go down. With an option, it's, it's, it's, how about this? There's no future contracts on individual stocks. There are not. And also, as a shareholder, can I petition the board to change the ticker from CME to FUN? You can petition the board. I don't know how far you'll get with that. All right.

Here's one of the key. Michael's really talking his own book here, isn't he? Wow. Here's one of the key differences between options and futures. The phrase out there is, I don't know if this is exactly true, but I'm sure it's direction of the truth. It's like 98% of options expire. are worth this, something like that. Talk about how the futures contract differs in terms of settlement and all that. Like, are people actually delivering these contracts that they holding

until is expiry even the right term? Like, how does that work? Sure. And that's what gets a little bit confusing. And it's not the first time I've been stumped with that. So I should have had a better answer for you on the options versus futures because they both have expirations. The differences, and you're absolutely right, like an option, when you buy an option, whether it's on a stock or a future, you're holding an asset that's going to expire. And if it expires in what we call out of the money, then it expires worthless. A future, on the other hand, if you hold it until expiration, and I should back up a second, because certain futures like WTI crude oil or gold actually will be physically delivered if you hold that contract until

it expires. Now, the reality is, if you're an individual trader, your broker is not going to allow you to hold that future until it expires because neither you nor they want to deal with the delivery process, right? I always get, I always get asked, well, I, or basically, I've heard a million times at industry events and things like that. I don't want to trade futures because I don't want an oil tanker showing up in my front yard. Well, the reality is that the broker isn't going to let an individual trader who's not prepared to take delivery of a thousand barrels of barrels of oil hold it until then. But if somebody were to hold one of those contracts until delivery, that's actually how it would settle. The person who was long would actually have to take

delivery of that physical product and the person that was short, would have to make delivery of it. Now, in other products like the S&P or the NASDAQ and things like that, they're what we call cash settle. So if you hold a futures contract that's cash settle like an equity index until it expires, we'll simply make one more what we call mark to market. So every day that you've held that futures contract, we've transferred money based on whether the position went for you or against you. So every, hold on, that's a key component. Every single day, you have to, you have to true up.

Every single day we do what's called a mark to market. So we're going to settle the price at a certain time every day depending on the product. And if you're along and it went up, we're going to transfer money to your account. if you're short and it went up, we're going to transfer money away from your account, right? You're kind of netting it out essentially, right? We're netting it out every day. Like I said, it's called a mark to market.

On the day that a cash settle futures expires, we make one more mark, we move the money, and the position goes away. So if you were long and you held it till it expired, it would expire and you wouldn't have a position anymore. You guys don't take IOUs. Those are as good as cash.

We're looking at, into the IOU, the digital IOU, I think. No, but it really is that simple on a cash settled product. Now, the difference between, maybe not the difference, but with the futures products, if you were long, let's say the NASDAQ 100 future, and you wanted to maintain that long exposure through the expiration. So, for example, the NASDAQ has four expirations, the quarterly expirations, March, June, September, and December. So if you were long, let's say the September NASDAQ future and you were coming up to the third Friday in September when it was going to expire and you thought the NASDAQ was going to keep going up or for whatever

reason you wanted to maintain that exposure you would simply do what we call a role which means that you would sell the September future and buy the December future so that would essentially get you flat in the December or I'm sorry in the September future and then you'd be long the December, maintaining that exposure to the NASDAQ 100. And that can be done in one transaction at CME. How do you know if somebody is good for the money? So in other words, let's say somebody wants to buy a futures contract and it costs them $5,000. And then the position goes against them, but they don't have collateral in their account. Like, how does that work? How do you make sure that somebody doesn't get themselves into trouble? Right. So some of that, so every futures contract

that's traded at CME clears through what we call an FCS. a futures commission merchant. Those futures commission merchants basically guarantee the trades of their customers, which in this case, we're talking about the retail customers. So if I were to trade, and I'm not allowed to trade futures given my employment here, but if I were allowed to, and if I were to trade a future, I'd have to find a broker who was either an FCM or had a relationship with an FCM. And that FCM is going to make sure that I have, you know, again, the performance bond that I

talked about before is going to make sure that I had that money in my account before I was able to place a trade. Now, in the case of the, let's say, the micro NASDAQ future, which I said is, you know, I'm not sure exactly what the margin is or the performance bond is at this time, but let's say it's around $4,000. I'd have to put up that, they would make sure that I had $4,000 in my account before I could initiate that position, and then if the market went against me, I'd have to essentially maintain a certain amount, we call that maintenance margin. I'd have to put more money in my account in order to maintain that for the next day. So how about how do the costs work? Because I know there could be role costs depending on the price of that new futures contract.

So what is it, how much does that actually cost to trade these things? Yeah. So there would be commissions. essentially is the answer to that. So CME has a fee that we're going to charge. And then whomever, whichever broker you might be going through is going to charge you a commission on that. And that varies from broker to broker. And I think a lot of times it varies depending on how many futures contracts you're trading. Sometimes brokers will tier their costs if you're trading, you know, a lot of futures. But essentially that's it. So if you look at a lot of the retail broker websites. It will give you the commission for each contract. And then there'll

usually be a footnote that will say plus exchange fees. And that's the CME fee. Here's one of the differences between trading futures or correct me if I'm wrong, training futures versus just trading spire or something else. When you transact in the cash market, you're buying shares from somebody or basket of stock from somebody. Somebody's selling, you're buying. And the futures market, it doesn't really work that way, right? Like, isn't there somebody, who's selling you the contract versus somebody who's buying the contract? Yeah, that's exactly right. So if you go back to that very basic definition of what's a future, it's simply a contract

to buy or sell something at some point in the future. So it's not this concept of there's a finite number of shares, for example, of the S&P future. If you and I were to make a trade right now, we would essentially create what we call one contract of open interest. So if I were to buy it and you were to sell it to me, we would. we've created what we call open interest in that particular contract. So it's not this idea of you have a share and I'm buying it from you,

which is also why if I wanted to short a futures contract, it's a lot simpler than if I wanted to short a securities contract where I'd have to borrow, essentially borrow that in order to then short sell it. With futures, because it is a contract, I simply sell it and you buy it. So what are the reasons people using futures? Obviously, hedging seems like to make sense. maybe you think the market's going up in a short period of time. Like, what else am I missing?

What are people using these for? Yeah. And if you go all the way back to the beginnings of the exchange, you know, and if you listen to that earnings call that you alluded to at the onset, a lot of times you'll hear our chairman and CEO, Terry Duffy, say, CME is the place that the world comes to manage risk. So at its most fundamental level, you're absolutely right, Ben. Futures are designed and were created 200 years ago. as a hedging vehicle, right? At that time, it was farmers that were hedging their crop.

When you look at like the individual or the retail trader, a lot of what they're using futures for is basically a product in their active trading portfolio. So they may be intraday scalping futures. They may be swing trading futures with a one to three day time horizon. Maybe they're swing momentum trading with a little bit longer time horizon. And then there are, of course, individuals that are using futures to hedge maybe like a long stock portfolio if we're coming into like an earning season, for example, or a big employment or inflation number. You also have individuals that, again, are using futures to hedge that long stock portfolio that they may have. So it kind of runs the gamut, but I would say mostly they're using

it as an active trading vehicle. So one of the greatest commercials and the history of Wall Street, is this. A man and a woman sit down at the table. You know what I'm talking about, Craig? I'm not sure. Okay. And she says to him as she sits down, did you hear about the NATO plane down by Russia?

Markets are a mess. Everybody's selling. Or at least trying to if their brokers are up and running. And he says, but it's almost 8 o'clock. Everything is closed. And he looks at his watch. And she says, that depends on who your broker is. I could trade in Chicago, London, Hong Kong right now.

Wow, the market's already down 2%. I'm sorry, I need to do some hedging trades. You remember this one? I don't. No, I haven't seen this one. Ben, you remember this one. It was on CNBC for a while. It was a classic.

It is a classic. So it's interactive brokers. Credit to them. Okay. But the reason why I break that up is because, first of all-time classic, what a banger. But also, to Ben's point, there are people who are very comfortable holding whatever positions they are for the long term.

but they might be bearish in the short term and whatever, want to do some hedging trades, just like she did. And she's willing to spend a couple of bucks, whatever your risk tolerances to protect your portfolio, and you get some leverage. And I'm sure that is a critical use case. Absolutely. There's no question about it.

And that's more of the use case that I was alluding to kind of the second half of my answer was certainly there's a lot of individual traders who are long, maybe a basket of technology stocks. they can use the micro or the e-mini NASDAQ 100 to hedge that in the short term, right? Or, you know, maybe they call it trading around a position. They're long a basket of equities, you know, whether it's technology or otherwise, and they sort of trade around that position. That's kind of their long term, but like kind of exactly what you just mentioned, they

think in the short term we're going to come into some volatility. So they use futures to, quote, trade around that core position. And that's certainly a use case that we see. All right. Here's another one from the earnings report. I believe this is. Yeah, it is. Okay.

Record cryptocurrency average daily volume of 300,000 contracts. That's $13.6 billion notion. Wow, I'd like to see the people that are doing this. Although I'm sure it's a lot of computers and a lot of maniacs respectfully. Actually, we just hit on a thing that I want to mention. When you see it notional, what does that term mean? It's a great question. and sometimes we gloss over it.

So I'm going to go back to the micro-imini NASDAQ example for a second. So right now, the NASDAQ, I think, is trading around 24,000 or something like that. Futures have what we call a multiplier. So instead of like 100, people are used to trading 100 shares of stock. To contrast that with futures, it's a multiplier. So in the case of the micro-imini NASDAQ, the multiplier is two. So what you would do is take the current value of the index or the current futures price, let's call it 24,000, multiply up by two to come up with 48,000.

Well, that's the amount of exposure that you have to the NASDAQ 100. It's what we call notional. So we use the word notional exposure, but essentially just means that you have $48,000 worth of exposure to the NASDAQ, such that if the NASDAQ went up by 10%, you would expect to make about $4,800 on that, make or lose, I should say, on that trade. All right. So getting back to the crypto stuff, what does that look like? Where can people, God, I'm afraid to even ask this question.

How do people trade futures on crypto using the exchange? Great question. And it's obviously a newer asset class that we have. And generally what we see is the micros in the crypto are particularly interesting. I should say the retail trading crowd is particularly interested in the micro-cryptos because the bigger cryptos are a really big contract. So the first futures contract that we launched on cryptos was what we would call the standard-sized Bitcoin, which is a contract worth five Bitcoin.

So what is it, Bitcoin? Let's call it $120,000. That's $600,000 worth of Bitcoin with one futures contract. So if you were trading this. the standard Bitcoin, again, we'll go back to Notional Exposure, you'd have $600,000 worth of Bitcoin exposure with one futures. And when you think about how volatile Bitcoin can be, that's an extremely large futures contract for a lot of individual traders.

So what we've seen is a migration of the retail traders to what we call the micro-sized contracts again. And just to contrast it with the standard, the micro-bitcoin is one-tenth of one Bitcoin. So still a relatively large product at over 10,000, but much, much more manageable for the retail trader or investor than that standard size Bitcoin at five Bitcoin per contract. So what's the breakdown in terms of like how much has crypto gained market share for you guys in terms of trading volume or however you want to notional value or whatever is easiest to benchmark it? Yeah, I don't have the specific numbers for you at my fingertips, but certainly since, you know,

really since the last election and we kind of saw cryptocurrencies in general catch a bit, if you will. We saw an increase in prices, really across all cryptocurrencies. We certainly saw a huge increase in our trading since then. And it continues today. So it's really, you know, certainly from a retail perspective, it's one of our faster growing products. I don't have the specific percent increases in front of me, though. your title is head of retail education. What does that mean? What are you doing to help people? Yeah, I think, you know, as we've seen this increase in retail trading and futures that you guys have talked about throughout, we have a responsibility to make sure that traders or potential

traders of futures understand the products that they're trading, right? Because there are these nuances that we've talked about throughout this conversation, like the leverage, like margin, like the expirations, everything like that. So as we've seen this increase, I think it's become more and more important. And there's a bit of a, you know, sort of chicken and egg. I think, you know, one of the reasons that we've seen this increase in retail trading and futures is because there is so much education available

to retail traders that, you know, wasn't there 10 or 20 years ago. So our job is to make sure that traders understand how the products work, the risks involved, Obviously, right, we've talked about this idea that you only have to put up a small amount of the notional exposure you're getting. So people have to understand that with that, it's a double edged sword. It's a leverage product which can accelerate gains and losses. So all of this stuff. And then, you know, obviously we want to educate people on the different markets that we have futures, on which we have futures as well.

I feel like people that want to get leverage, like let's just say if they're in the double X or the lever. or the levered ETF, for example. There are some people who don't know how that works. There are some people who think that if they buy and they hold that, they're getting 2X exposure every single, like it just compounds. They're just actually getting it, whether they hold it for a week or a month or a year, they think they're getting 2X over every period of time, which is obviously not true.

I kind of feel like, and I'm making this up and maybe I'm just hoping that if you weren't trading a futures contract, you kind of know what's up? You know what I mean? I feel like you have to have, there has to be like a step that you take to be a futures trader, even if it's your first time, these are people who sort of kind of know what they're doing. You want a driver's license for futures traders? Yeah, yeah, pretty much. I'm saying they've got their driver's license. We don't want to go so far as to require driver's license, but you're

absolutely right. And the population that we sort of target is certainly the more sophisticated retail trader. There's no question about that. And to go back to your first comment, I'm not sure I understand how the two times and three times short and long levered ETFs work. But I understand how futures work. And, you know, one of the things that I think, you know, is, is nice about futures is let's just take WTI crude oil. You're literally trading WTI crude oil. So you don't have to worry about is it correlated with this or that or is there a decay in the like some of the leveraged ETFs that you're talking about, you're trading the pure commodity. And, you know, one of the things we say is what's more correlated to crude than crude. So when you're trading futures, you are literally

trading that particular asset. And then, but, and then the follow on to that is, is you're absolutely right. People that are trading futures tend to learn how they work, tend to be experienced traders and kind of like you said, know what they're doing. I mean, the cash settlement at the end of the day makes it very, you're going to learn fast. You're going to, Absolutely. You know, you're going to get marked every day. You're going to get a debit or a credit. And you're levered on that, as we've talked about. All right. Craig, was there anything that you think is important for people that are listening for the first time or even if they're experienced? Any big topics that we might have missed? You know, I think we touched on most of them. Nailed it. Nailed it. You know, the whole idea, and you guys have asked me, why are people trading futures? And, you know, And quite simply, people are trading futures because of that capital-efficient nature, because they're open around the clock, because if you've got less than $25,000 in your account, things like pattern day trading rules don't apply, the ease with which you can get long or short.

So, you know, I think we covered a lot of the basic reasons that we're seeing an increase in futures trading. Perfect. Where do we send people to learn more about the CME group? We have a, what I think is a world-class educational portal called See Me Group Institute. And if you go to see megroup.com slash education, it'll take you right there. It's our educational portal that has what I would consider 101 level classes all the way up to maybe what I would consider graduate level classes and futures. So I think it's a great place, whether you're just starting in futures or you've been training them for a long time to understand the product and what's offered.

and, you know, I don't think there's anything, any such thing is knowing too much. So I think it's a great place, a great resource for people to go to. Perfect. Thanks, Craig. Okay, thanks to Craig. Remember check out CMEGgroup.com to learn more. Email us Animal Spirits at the CompotNews.com.