CME Group Inc is making a major move into the single-stock futures market, offering investors a new tool for around-the-clock trading of bullish and bearish positions, further expanding its derivatives portfolio.

On Monday, CME announced the official launch of 55 US equity cash-settled single-stock futures contracts, along with 22 micro contracts for underlying assets.

These products will trade on the CME Globex platform from Sunday evening through Friday afternoon, with just a one-hour daily maintenance window. This allows investors to react swiftly outside regular US trading hours, such as during earnings season or major events.

Underlying stocks include high-profile names like SpaceX, Nvidia, Tesla, and Apple.

Morgan Stanley analyst Michael Cyprys noted in a research report that multiple retail brokerages have described this launch as "the most important retail growth catalyst of the year," with over 35 retail partners planning to complete preparations within the first day to the first week.

Perpetual contracts (perps) are increasingly becoming a new threat to traditional exchanges. CME's introduction of single-stock futures is also seen as a strategic move to counter this trend and solidify its market position.

CME shares are down 5.3% year-to-date, closing slightly higher by 0.02% on Monday.

Product Design: A Simpler Leveraged Tool Than Options

CME stated that single-stock futures are designed to offer a simpler way to express long or short views compared to options. Unlike options, single-stock futures do not involve time value decay or sensitivity to implied volatility changes, and they require only a small amount of margin for higher capital efficiency.

The contracts are cash-settled, with the final settlement price based on the official closing price of the underlying stock on the expiration date. Holding a contract does not represent ownership in the related company. Standard contracts represent 100 shares, while micro contracts represent 10 shares.

CME indicated it will expand the range of underlying assets based on customer demand and listing criteria.

Perpetual Contracts Pose a Competitive Pressure

Among the newly listed underlying assets, SpaceX is particularly notable. As one of the most anticipated IPOs on Wall Street recently, international platforms, including the decentralized platform Hyperliquid, have already offered perpetual futures trading for SpaceX before its official listing.

Perpetual contracts (perps) are increasingly becoming a new threat to traditional exchanges.

These futures contracts with no expiration date are currently not legal in the US, but regulatory signals are shifting. Kalshi and Coinbase have both received approval from the US Commodity Futures Trading Commission (CFTC) this year to offer cryptocurrency-related perpetual contracts. The market widely views this as a precursor to regulatory openness for stock-based perpetual contracts in the future.

As a result, traditional exchanges like CME have faced significant pressure this year, with investors concerned that the rise of perpetual contracts could erode their traditional trading businesses. CME's launch of single-stock futures is also seen as a strategic move to address this trend and reinforce its market standing.