Good to go? All right, everyone. Welcome to, I think the session everyone in this room has been looking forward to most. It's my pleasure to welcome Terry Duffy, Chairman and CEO of CME Group. CME is the world's largest futures exchange. Terry has led CME, I think, for over two decades now, around two decades. Been a staple of this conference for many years. Always appreciate your support and you making the trip up here. A pleasure, Patrick. Thank you. All right. Yeah, thanks for coming. All right, I want to start off. Let's just address the elephant in the room. On Friday, the CFTC moved to approve the Bitcoin perpetual futures contract for Kalshi. I know you went on CNBC yesterday. I thought you laid out your case. Can you just maybe, for everyone in this audience, what do you think of that ruling and what it means for your business? Well, first of all, Can you guys hear me okay? Okay, thanks. It was called what in our world was a 40.3. So 40.3 ruling means it goes up for a full review, meaning that if there is something there that the industry should comment on that's new or novel or complex, the CFTC does what's called a full review. They did the review in less than what's called a self-certification, which is a 40.2. A self-certification means if there's no objection in 24 hours, you can go ahead and list that product. That's how the two rulings work. They said they did a full review, and they did it actually shorter than they did on a self-certification on something, in their own words, in their own order, were called novel and complex, which troubled me. In 2000, I'm old enough to know all this stuff, there was something called the Commodity Exchange Act. It was the last act passed for all the core principles of the laws of our industry. In that, there's a centerpiece that suggests. Because you have to have a centerpiece to all legislation. What is the centerpiece? The centerpiece was, what is a futures contract? You define the core principles afterwards. The Commodity Exchange Act defines a futures contract as a contract to be traded with a delivery date at a later date or an expiration date at a later date. Nowhere does it contemplate that it can go on in perpetuity. A perpetuity or perpetual is a contract that never ends, and the way they keep it in track is through a funding rate. I said that that is not a futures contract. That is a swap, if it's anything. I totally disagree with the government, and I'll deal with it as the way we need to move forward. I'm concerned about this and for a whole host of reasons. Perpetuals in the European Union today trade anywhere from 20 to 250 x leverage. Let's think about 20 to 250 x leverage on an auto-liquidation model and how it works. At CME, we have the largest open interest of institutional crypto in the United States. The leverage that we extend is 5:1. Leverage in the European Union is anywhere from 50 to 250:1. How can that possibly be something that's sustainable? I have grave concerns with the way these contracts are set up. They're also set up, just so you understand what a perpetual is. On a perp, there's a funding rate associated with it to keep it tied to spot. If you long a contract and the other person's short a contract and the contract's going up, the long has to pay the short in order to keep it tied to the spot contract. If you are American Airlines or you're an airline and you put on a perpetual hedge during the Iranian war, where the crude oil went from $55 a barrel to $110 a barrel, you would have paid funding rates all the way up. Your hedge that you thought was good would have been eroded by the funding rate cost to the short side of the market on the way up. It does not work for institutional hedging at all. Let's talk about the retail and why the retail likes to participate in this product. Anytime you give somebody a dollar and you say, "Listen, we'll let you leverage it for 100," they're probably going to do it. That's just the nature of what people do. It doesn't make it right. I've spent 30 years of my career building, nurturing, and bringing in retail participants into the market with tools and education so they can be sustainable and help them grow. I'm really concerned that, and I said this yesterday, I really believe it's 2007, the housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen. That doesn't suit anyone's interest. Ecosystems are important for all participants, and I don't like to see people that don't understand products to potentially get blown out of a contract that they shouldn't be in in the first place. I'm concerned the way the government did this, and I'm concerned on how they go forward. You have to look at the use case, and we'll see how that pans out. As I clearly described, there's no way that anybody's going to use this from an institutional standpoint when the hedge is not a one-to-one hedge. It could be eroded against your risk on the other side of the trade. That's helpful. I think the one thing a lot of people in this room are wondering about is you're obviously concerned with what the CFTC has done. Do we think that this is going to be done on a case-by-case basis and they're going to move meaningfully beyond just Bitcoin? Obviously, that's the fear, but have you had conversations with them? Is this something you think they're going to do? I've had a lot of conversations with the agency, of which none of them have come to fruition to what they told me. I'm really disappointed, to be honest with you on that. I don't know what they're going to do, to be honest with you, Patrick. They believe that innovation is critical. I believe innovation is critical, too. I also believe that good, smart regulation is a hell of a lot more important than innovation, because if you don't have good, smart regulation, you're not going to have any innovation whatsoever. I don't know what their plans are moving forward. They have not announced them. They haven't even talked about what the leverage they're going to offer from these products. Are they just going to adopt the European model and allow leverage like that? If they do so, they will go against their own regulatory framework that they have at the CFTC today. You have to be in compliance for a futures contract to have 99% margin coverage. Example being, if the West Texas Intermediate has a 10% margin associated with it, and you have a 15% move all of a sudden. That means you're 5% breach of the 99 because you'd be at 95% or 94% on your coverage. Well, you can't do that. You have to be at 99%, so you have to immediately take it back up. When you offer leverage of this nature throughout the union, the way that some of these platforms that are unregulated today, whether they're on DeFi or others, they just don't fit with what the agency has on its own books. Are they going to change the rules for the sake of innovation? That's why I say it's potentially 2007 for retail. I'm very concerned about this because it's not healthy. It's not a competitive issue. Retail is not the biggest part of CME's business. I'm an institutional exchange managing risk for the largest companies in the world, and that's what we do, and we're really good at doing that. Retail is just another component. I think people should have the ability to participate at a size level that meets their needs. It doesn't mean they should be able to do that in a reckless manner that could potentially impact prices throughout the day. You drew an analogy on CNBC last night that I want to touch on. You said that this reminded you of Sam Bankman-Fried and FTX. Not regarding the fraud, but regarding the auto-liquidation mechanism and specifically if perps proliferate in the U.S. and exchanges were put in a position where someone like yourself, and this would be a question within a question, but if you were forced to participate in this market, where would the systematic risk actually sit? Is the U.S. clearing a market infrastructure ready to absorb it? I get that that might be a difficult question to answer when we don't know what the leverage is, but how do you think about that if you were forced to move forward? Yeah. You asked a lot of questions in there. First of all, when it relates to Sam Bankman-Fried and what his model was, it was flawed. I knew it was flawed. I think I got a call last night from Tarek, from Kalshi, and he's all upset because he thought I gave him the analogy that he is Sam Bankman-Fried. I never said he's Sam Bankman-Fried. I said I've just seen leverage models like this before. I didn't say Tarek was a criminal. I guess some of his friends thought I called him a criminal. I didn't. I actually like the young man. I think he's an interesting guy. Your question is, how would I operate in a world of perpetual? When it came to prediction markets, one of the things you said when people were saying, "Is this gambling? Is it not gambling? Oh, it's gambling. Well. Oh, that wasn't a question? You said, "It doesn't matter what I think, but if the regulators are going to allow it, I'm going to be prepared to- I said that as it relates to prediction markets. I never said that as it relates to the definition of a futures contract. The definition of a futures contract, and I'll say it again, is a contract that is listed for trade with a future expiration. That is not a perpetual contract. You can't draw the same distinction, Patrick, between prediction markets and the definition of a futures contract. Those are two different things. I won't fall for that trap. You want to talk about predictions, I'll talk about them. You want to talk about perps, I'll talk about them. They're not one and the same. Yeah. No, I'm not trying to trap you. I'm just saying so your stance is that if this is to proliferate and the CFTC starts approving these perps, CME as an exchange will not act to participate. I never said such a thing. I didn't say that. I didn't say I would or would not. I don't know what we would do if, in fact, that the world believes that this is a new world order. I already described how they do not work for institutional participants. When 85%-90% of my business is institutionally driven, do you think it's a smart move, or my investors think it's a smart move for me to pull all the stops out to try to go after a few percent of business on something that doesn't even work? A perpetual is unhedgeable. A perpetual is tied to the spot market. If I was to list perpetuals, I would be saying to myself, "Well, I think the spot market might be broke, and here's maybe a better way to help fix the spot market," but it's not a futures market. Does that make sense to you? Yeah. It's not your answer that you want, I get it. I'm not going to sit there and say what I would do if perpetuals become the law of the land because they're unhedgeable, and I have 90% of my markets institution who hedges products. I have 135 million open positions on CME, more than any other exchange in the world. I'm holding 400 billion of capital on behalf of the largest institutions of the world. I'm not in there battling away for the small retail participants with no capital. My retail participants are retail participants who trade anywhere from 10-50 contracts every day, every single day, not once in a blue moon or taking a prediction on will somebody arrest Maduro tonight or tomorrow, or will a war break out, or will the price of oil go down if I make this comment? I'm not in that world. Okay, last one on perpetuals. Trade [XYZ], S&P licensed the S&P 500 perpetual. Yep To the company Trade[XYZ] on the Hyperliquid blockchain, I asked you about it on your earnings call. Have you had any discussions with S&P about it? Do you feel like this is infringing on your licensing agreement with them? Any thoughts there? I know it's infringing on my license agreement with them, and I'm sure my lawyers are cringing right now, but that's just the way it goes. They infringed, with this, we are convinced of that. I've been working with my partners at S&P Global, and I think we'll come to a solution that it might take a little time, but we'll get there, as I said on my earnings call. Yes, I feel that they infringed on my intellectual property. All right. Let's shift gears. Let's talk about the environment for your business. CME has posted a record quarter just in the first quarter, ADV was up 22%, open interest was up 11%. You have records across all six asset classes simultaneously. How are you feeling about the macro backdrop heading into the back half of 2026? I think that there's a lot of people being a little bit dismissive of what's going on in the world. I've been saying this for quite some time. Geopolitical risk is absolutely the biggest risk that the world has, no matter what they say. What we're not talking much about, like we're talking a lot about what's going on in Iran, and it seems like the narrative of the story changes by the second. I understand that it's war, and we're not going to get the full information. The intelligence in the government needs to be somewhat cooperative amongst themselves and not tell us every little thing. I understand that. I think that the investor community might get a little bit misled because here they are, hearing certain iterations coming out of the administration that this could end next week, and then it's two months later, and we're probably maybe in a worse situation than we were two weeks ago. I don't know. I think that's a very big issue. No one's talking about what's going on with Russia and Ukraine. Russia is taking out parts of Kyiv now. No one thought that was going to get to that part because the United States was going to jump in and bail everybody out. That doesn't seem to be the case now. Then I think the biggest issue geopolitically that I think may not be the tale at the end of this year, but it's coming, and that's going to be China and Taiwan. It will not be a war. I don't see it being war. I don't think there'll be one bullet fired. China's going to surround it, and it's going to be game over. Out they go. We are not going to be able to do a damn thing about it because I can't see us getting into a war with China. I just don't see that. The question is, what does that mean from an investor standpoint? What does that mean if in fact China takes over Taiwan with the infrastructure they have in Taiwan, but it's run by the Chinese? I guess we'll all have to wait and see. If we don't think that that risk is coming, I think we're being a touch naïve. I think what does that mean? I think that from a geopolitical risk and a market potential risk and an investor risk, I think you have to be very prudent. I'm not just talking my book. I think that risk management, diversification of portfolios is critically important. I know we're all trapped in seven stocks. I know we're all trapped in artificial intelligence. I think there's going to be other companies that you're going to need to mitigate your risk, whether it's energy or financials or others, to diversify that, because this is not going away. I've been saying it for years, and I think it's come to fruition. When you have something like this happen, it's not made for TV. We all want wars to be made for TV, but wars are ugly, and they take time, and there's a lot of costs that go into them, and unfortunately, a lot of lives that get lost. I'm concerned about that. All right. We're running a little low on time, so I'm going to try to catch up a little bit here. That perpetual thing that you got all caught up on. Well, I wanted to let you talk on it. It's very relevant, and we all wanted to hear your perspective. We appreciate it. In terms of product innovation, you're going to relaunch Single Stock futures. Yeah here pretty soon. What's structurally different this time around that makes that something that you're examining? Nothing. Timing. In 2000, when we listed OneChicago, you dropped something there, sir. OneChicago, it was a joint venture between Chicago Board of Trade, Chicago Mercantile Exchange, and Chicago Board Options Exchange, Cboe. Three different parties with three different ideas of what they wanted to see Single Stock futures with two different regulators, SEC, CFTC. None of that has changed. The world was not ready, in my opinion, for Single Stock futures in 2000, nor when T-bills went away, that everybody said it'll never come back until the short end of the funding rate became very attractive, and all of a sudden, T-bills are back in vogue again for a second. I think it's about timing with Single Stock futures, and especially as we look at some of the mega market cap stocks that we're looking at all trading at today that I referenced a moment ago. I think Single Stock futures, the timing is perfect for them right now for a risk management tool. If you're long NVIDIA and you want to sell some futures against it, if you're going long a $1.7 trillion SpaceX IPO, you may want to sell some futures against them. We'll list some of the top market cap companies in the world. We'll keep it probably around 50 companies or less, and we think it's going to be a very attractive proposal, not just for the retail, but we think for the institutional participants, because like I said earlier, a lot of us are holding the same portfolio, so we need to have some risk management tools against it. I think the time is right. What does it impact? I think it impacts the stock loan business. Some of the companies that are on the stock loan business probably won't like it as much. I'll work with them. I'm working with the dealers today to make sure I don't impact their business. At the same breath, I think people want to make sure they can get in and get out of liquid markets in order to mitigate some of the risk with single stocks that they will be able to do versus borrowing the stock and doing it that way. Another big opportunity on the product front for you, I think, is Compute Futures. Yeah. Last month you announced the Silicon Data Compute Futures partnership. How do you think about that as a tradable asset class and that kind of opportunity it presents? I love it. Don Wilson came to me. Don owns DRW. Some of you may know Don. Don's a brilliant human being. I've known Donny for 40 years, and he came to me with this concept, and we took a small piece of the company through our ventures fund also. I like this a lot. I think if, in fact, we're going to continue down this path, we do need some kind of risk mitigation for these GPUs and CPUs. They have some other products in the pipeline they want to list as well. I'm really excited by this. I'm curious how, again, the concentration, I keep going back to it, but the concentration of ownership in stocks and especially with data and data centers, how do we start to lay out some of this risk? I'm excited by this. It'll be the first of its kind to be traded, so we'll get it up and running. We don't have the product specs out yet, so I can't talk about it too much in depth. I'm more excited about the potential of the asset class to be traded. All right. Touching on prediction markets, since going live in December, you've surpassed 270 million contracts traded, attracted over 150,000 new accounts. Walk us through where the prediction market business stands today, the partnership with FanDuel, how that's evolving, and how you're thinking about bringing on additional FCMs. I saw Interactive Brokers recently. Yep. How does that pipeline look? I think it's interesting because, with prediction markets, my whole goal and motive with FanDuel was not so much to have sports. Obviously, we didn't want to do that. When the prediction markets came about, I think the online brokers got caught a little bit off-size, and they needed to do something quickly. As a partner with FanDuel, we decided to go ahead and list some of these things that I felt I was comfortable with. They did not violate what's Core Principle 3 of the Commodity Exchange Act, which is readily susceptible to manipulation. Outcome-based, I was okay with, even though it doesn't change my opinion, is this gambling or is this a market risk? You already heard what I said earlier. I think it's gambling, but that's just me. It doesn't matter what I say because it's what the government says, and then, as you said earlier, I participate, so now I'm talking about that asset class. I think it's relatively interesting what's going on. I didn't think that we would get much trade outside of sports. I think when you look at Kalshi, I think 80% of their trade is sports-related. Yeah outside of some of the other events that they list. I think for the first time, and maybe Adam can correct me, but I think it's for the first time last month, we surpassed market event contracts versus some of our sports listed contracts. Pardon me? On a couple of days. That to me tells me that I was looking for the 13 million eyeballs that FanDuel has because most of those people participate at night, and if they want to go ahead and look at my markets during the day, great, and I look at it as a distribution play for CME for the future. All of a sudden, this has turned into people are actually looking to participate in some of these events on economic indicators, which I find very encouraging. I'm not going to speak to the sports side of it very much because I'm not a sports guy. I'm a sports guy, I'm just not a gambler. Got it. Let's talk capital allocation. You returned $3.2 billion to shareholders in the first quarter, another $758 million in asset sale proceeds. Yeah left to deploy. How are you thinking about capital allocation priorities, and how does M&A factor in relative to continued return? Well, I'm a big believer in returning capital to shareholders. I have been since I took CME public in 2002. I was one of the first companies back then, post 9/11, that did a dividend stock when everybody told me that if I do a dividend stock, I'm not a growth stock, so the company won't go forward. I never subscribed to that model. I've been a dividend-paying stock since day one. I want to return capital to shareholders. I also want to do smart, good acquisitions that make sense for my users, then in return that will make sense for my investors. That's exactly what we have done. We did that with the Chicago Board of Trade. We did the New York Mercantile Exchange and COMEX. We've done that with our JV, joint venture. Some of the things that we have done, I think we've done now with Google, even though they invested in us. M&A, I believe, needs to benefit the users because that's what benefits my shareholders. I'm very focused on that. If, in fact, we don't go out looking to kick all the tires on everything out there or buy anything that's available, I don't think that's a smart, prudent way to run a business. You have to be a good steward of your shareholders' money, and the way to be a good steward of your shareholders' money is to understand what your clients' needs are. If you don't do that, you can't run money on behalf of your shareholders. I stay focused on that, and if we don't have something that we think is meaningful to enhance the business, then I will return it to capital versus M&A. Great. Last question. Return it through dividends and other share repurchase and things of that nature. Got it. All right, ending, last question. You have a lot of irons in the fire right now, retail expansion, 24/7 trading, which I think you just launched in crypto- We did. for the first time. Yeah. Was it two weeks ago? Last week. Last week. Prediction markets, digital infrastructure. Where do you see the biggest opportunity for CME over the next three to five years? Yeah. I think that there's a lot of things that could come up, so you don't ever want to put yourself into a situation where you said, "Well, he said this is the biggest opportunity," and it went different direction. I think you have to keep your eyes and ears open to see how the world is shaking out, with the exception of perpetuals. I couldn't help that. I had to say this. Yeah. I really believe that efficiencies are where it's at. When I can create $85 billion a day, which I do every single day for the largest participants in the world, to free up that capital so they can deploy that in other ways of running their business, that's a very, very effective way of running your marketplace. I think for CME, efficiencies will continue to meet the needs of the clients, whether it's through stablecoins, not a floatable stablecoin, but a stablecoin potentially [this] for my ecosystem, which can eliminate friction on payments, which could help support 24/7 trading on some of my products, or it just eliminates some of the cost of moving money. There's other ways, but I think efficiencies through some of these innovations, is where CME will be at for the next several years. All right. Well, that's all the time we have, Terry. It's been a pleasure. Oh, my pleasure. Thank you for joining us. Thank you, Patrick. Appreciate it.