CME Group plans to introduce futures and options linked to the performance of professional and college sports teams and athletes through a partnership with index provider FutureSports.
The first FutureSports Performance Index futures could begin trading this summer, subject to regulatory approval. The contracts will be cash settled and offered with monthly and quarterly expiration dates, with additional product details expected in the coming weeks.
FutureSports converts official play by play statistics into rules based indexes designed to measure performance across sports played on fields, courts and ice.
Unlike binary contracts that settle based on whether a team wins or loses, the planned CME products will reference continuously priced indexes based on a broader set of team and athlete statistics.
CME said the contracts could be used both for trading and for managing financial risks connected to the sports industry. Potential users include stadium operators, sponsors, insurers, apparel manufacturers and broadcasting partners whose revenue can be affected by team and athlete performance.
