At a glance
- The contracts would track the cost of computing power used for artificial intelligence.
- BGC Group set up a dedicated division in June to handle secondary trading in compute and memory capacity, including real-time risk management.
- For allocators, no US exchange has CFTC approval to list a compute contract, which suggests there is no public settlement price against which to value a compute-linked position.
BGC Group, ADM Investor Services and Nanhua USA are building compute-futures businesses before US regulators have cleared any contract for listing, according to a Bloomberg report cited by Hedgeweek. The contracts would track the cost of computing power used for artificial intelligence. Brokers expect hedge funds and institutional traders to use them for hedging and for arbitrage between power, gas and data-centre capacity prices.
BGC Group set up a dedicated division in June to handle secondary trading in compute and memory capacity, including real-time risk management. Nanhua USA has reported growing interest from technology-focused clients, and ADM Investor Services is considering expanding its research capabilities to support the market. “There’s definitely going to be significant interest for it from those looking to hedge,” said Zach Espinosa, co-head of compute infrastructure markets at BGC Group, adding that standardised contracts would help improve liquidity.
For allocators, no US exchange has CFTC approval to list a compute contract, which suggests there is no public settlement price against which to value a compute-linked position. A fund marketing compute relative value today would be trading capacity through a venue such as BGC’s division, where Hedgeweek reports the eventual size and liquidity remain uncertain. Capacity, counterparty and valuation method are the questions such a sleeve raises.
Four exchanges — CME Group, Intercontinental Exchange, Nodal Exchange and Architect Financial Technologies — are awaiting CFTC approval to launch their contracts. In August the CFTC prevented exchanges from listing compute derivatives until a public comment period is complete, prompting prediction-market operator Kalshi to withdraw related event contracts.
Peter Keavey, CME Group’s global head of energy and environmental products, said the scale of leverage and financial exposure involved in AI infrastructure development created significant need for risk-management instruments, according to the report. The brokers do not control the timetable. Listings are held back pending the comment period, and no approved listing date appears in the report, so the pace of approval determines when a hedge fund can trade a listed compute contract.
Who wants the exposure
Hyperscalers, cloud providers and AI developers are the other prospective users, alongside hedge funds seeking arbitrage across energy and compute markets, according to the Bloomberg report. That mix matters for a manager weighing the trade: the natural hedgers are the companies carrying the infrastructure cost, and the funds would be taking the other side of a price relationship that has no long trading history.
Reported by the Hedge Funds & Liquid Alts desk from Hedgeweek and Bloomberg (cited in Hedgeweek report). Published . Corrections