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Cboe's Head of Prediction Markets on What's Coming Next

NowPress play to follow along0:00 / 17:04
Chapters8 segments · tap to seek
ticker lesson

Breakdown

0:00lesson

Cboe Predicts offering and its role in volatile markets

  • Cboe Predicts covers binary and non-binary outcomes
  • Binary options on XSP introduced
  • Vertical spreads offer directional bets
  • Binary contracts allow precise economic views
2:20lesson

Corporate KPI options and macro indicators

  • Corporate KPI options launched on SEC side
  • Macro indicators like CPI and jobs report on CFTC
  • Cboe BZX products regulated by CFTC
  • Investor protections differ between SEC and CFTC
4:46lesson

Binary vs. vertical spreads and market structure

  • Binary contracts offer all-or-nothing payouts
  • Vertical spreads provide partial returns
  • Cboe offers more flexibility than Kalshi and Polymarket
  • CFTC-regulated products lack underlying options
7:20lesson

Securities wrapper and investor protections

  • SEC side offers stronger investor protections
  • CFTC side focuses on risk hedging
  • Cboe BZX products are securities
  • Retail traders benefit from exchange-backed products
9:43lesson

Institutional liquidity and market evolution

  • Institutions bring significant liquidity
  • Products allow precise hedging and speculation
  • Example: Corning's iPhone revenue hedge
  • Granularity adds surgical precision
12:07lesson

Granularity in subject matter and duration

  • Granularity in risk: iPhone sales vs. Apple
  • Granularity in time: intraday to monthly
  • Products allow long-term views on indicators
  • Flexibility in managing risk and size
14:44lesson

Contract sizing and exposure differentiation

  • XSP binaries are $100 notional
  • Corporate KPIs are $1 contracts
  • Different sizes for different exposures
  • Market development leads to more size options
16:55lesson

Trading hours and 24/7 market evolution

  • Current trading hours are normal
  • Risk is a 24-hour problem
  • 24/7 trading is a future goal
  • Prediction markets will become the news

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