CME
* Mcap $90B
* P/E at current price ~20x
CBOE
* Mcap ~$26B
* P/E at current price ~19.0x
I'm just gonna skip the financial details because they really don't matter here. Both are highly successful companies that grow year over year with juicy margins.
Here is the reality:
The market is in turmoil because the Trump admin gutted the CFTC and is rubberstamping rulings that favor deregulation and crypto. The former CEO of CME, on behalf of the company, is suing the CFTC for breaching the Dodd-Frank Act. CME believes there's significant harm introduced into the market by the approval of these products, which they argue are swaps and not futures contracts. This is important because the perpetual futures dealers (Kalshi, etc.) aren't licensed or collateralized enough to deal with the margin requirements of swap trading, which are not fungible and cannot be used to hedge risk.
**How does this translate into a trade?**
In actuality...there's really nothing stopping these guys from implementing the same perpetual futures instruments if they really wanted to. Combined, CME and CBOE either produce or are the exclusive licensing rights holders of most of the major indices future market products anyway. I think CME has a very realistic take on the crazy riskyness of these swap contracts. For what it's worth, I think they are actually right. Their clientele is mostly institutional and their products are genuinely used to hedge risk. These perpetual futures as rubberstamped by the CFTC don't actually fucking do shit towards that and labeling them as "perpetual futures" is a genuine scam.
I see a few possibilities here:
-They relent and play ball
-They duke it out and the stock might trade sideways for a long while.
-The retail clientele is successfully deleted in this market by the accumulated deregulation and we have now entered a recession (lol), at which point these tickers act as consumer defensives because they have incredibly low beta anyway.
If the selloff stops and a base is forming, see a long term speculative buy and hold opportunity here. If anything, these are great picks to hedge against crypto and market weakness.