CME Group is offering incentives to trading firms to boost activity in its event contracts market, as the derivatives exchange seeks to gain ground on rivals in the rapidly growing prediction markets sector.
CME Makes Fresh Bet on Prediction Markets with Liquidity Plan
17 April 2026 - 23:06 CEST
By Ana Pereira
In a filing with the Commodity Futures Trading Commission (CFTC), the CME said it will launch an incentive programme for event contract swaps from 1 May to 31 Oct. By attracting more liquidity providers, the company is targeting a slice of a market led by early movers such as Kalshi and Polymarket. Kalshi's weekly volumes have surpassed $1bn, according to Reuters, while Polymarket processed more than $3bn in contracts tied to the 2024 US presidential election.
The move commits resources to a business line that until recently sat on the edge of mainstream finance. Prediction markets allow traders to buy and sell contracts linked to future outcomes such as elections, economic data releases, central bank decisions or sporting events. Prices are typically interpreted as the market's implied odds of an outcome occurring.
Prediction boom
Once viewed as niche, the sector moved into wider public view during the 2024 US election, when political contracts drew sharp increases in trading activity and media attention.
Brokerages including Robinhood have since entered the space through partnerships, while Intercontinental Exchange, parent of the New York Stock Exchange, agreed in October 2025 to invest up to $2bn in Polymarket. The deal also gave ICE rights to distribute Polymarket data to institutional clients.
For CME, whose core business is derivatives contracts tied to interest rates, equity indexes, energy and commodities, the sector offers a new source of transaction fees and a way to diversify growth.
The exchange said it may admit up to seven proprietary trading firms to the programme. Participants must already be active in the contracts and must have averaged more than 200,000 passive sides a day in the prior month. In practice, that means CME is targeting market makers and high-frequency firms that specialise in continuously posting bids and offers.
Battle over oversight
The regulatory tide for prediction markets is also shifting. The CFTC issued on 2 Apr an Advance Notice of Proposed Rulemaking, the first formal step toward creating a new federal framework tailored to event-based contracts and prediction markets.
The federal agency has also been fighting in court against several US states seeking to oversee such markets under state gambling laws, with the CFTC arguing that federally regulated event contracts fall under its exclusive derivatives jurisdiction.
