The futures are now

If you’ve ever thought to yourself: Gosh, it would be great to buy enough leveraged SpaceX to give Warren Buffett a heart attack—then this is your lucky day.

CME Futures Group launched single-stock futures today, enabling investors to bet big on some of the most popular US stocks without even owning a share. And if that wasn’t enough to excite you, CME’s single-stock futures will be available to trade 23 hours a day, 5 days a week. The exchange is starting by rolling out futures contracts on just 55 stocks, including Nvidia, Micron, and Palantir, with a contract representing 100 shares of each stock. The exchange is also rolling out 22 “micro-single stock futures” which represent 10 shares of the underlying stock.

CME Group actually first tried this 24 years ago, but the idea flopped after investors didn’t show enough interest. Today, however, is a very different market.

How it works: When you hear futures, you might think of commodities trading. But futures work similarly for other assets. Essentially, single-stock futures let you speculate on a company without using options, which makes it more accessible for the average retail investor. One of the most practical uses, according to Bloomberg, is to gain exposure to a popular stock that has limited share inventory—like SpaceX’s recent IPO, for example.

ETF: Every Trade Flies

It feels like only a few short years ago that Wall Street looked at the r/WallStreetBets crowd with disdain. But over the past few years, those degenerates have become a solid customer base, and retail-friendly investing options are flooding the financial menu.

Single-stock futures aren’t the only new innovation targeting retail traders. Exchange-traded funds, the investment vehicle that popularized passive investing and brought the “set it and forget it” retirement-savings strategy to the masses, are now being wielded for some mind-boggling trading purposes. Some of the most popular options on the market include inverse and leveraged single-stock ETFs, as well as thematic funds covering booming industries, like memory chips.

Zoom out: Do most people seeking a well-rounded portfolio need leveraged exposure to single-stock futures of ETFs? No. Will there always be a market for high-risk, high-reward trading that’s more like gambling than investing? Yes. The only difference is that the market (and our economy) is catering more and more to the latter.—LB