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CME Group plans to introduce futures and options tied to the performance of professional and college sports teams and athletes through a partnership with index provider FutureSports.
According to the company’s announced plan, the contracts would be cash settled and based on rules-driven indexes built from official team and athlete statistics. The first FutureSports Performance Index futures could begin trading this summer, pending regulatory approval.
That makes this different from a standard sports bet or a simple yes-or-no event contract. The proposed CME products would reference continuously priced indexes built from a broader set of performance data rather than a binary win-or-lose outcome.
The planned contracts are expected to have monthly and quarterly expiration dates. FutureSports says it converts official play-by-play statistics into indexes across sports played on fields, courts and ice.
FutureSports will independently administer the indexes under published governance and methodology procedures. Sports leagues would provide the official data used to calculate the indexes, but the leagues would not take part in setting index values or governing the methodology.
CME has not yet detailed the full contract specifications in the source material, and the launch still depends on regulatory approval. FutureSports also plans to announce partnerships with the professional leagues whose data would support the first products.
For readers who follow sports-related prediction products, the announcement is notable because CME has already worked with FanDuel on event contracts covering sports outcomes as well as financial benchmarks, commodities, cryptocurrencies and economic indicators. This new effort goes further by targeting team and athlete performance through index-based contracts.
Potential users listed in the announcement include stadium operators, sponsors, insurers, apparel manufacturers and broadcasting partners that may want to trade or hedge sports-industry exposure.
What to watch next: which regulator signs off on the contracts, which leagues partner with FutureSports, and whether CME confirms a specific launch date later this summer.
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Source: As reported by cryptobriefing.com.
