Where is the Real Money? Prediction Markets vs. Futures MarketsE-mini S&P 500 FuturesCME_MINI_DL:ES1!JimHuangChicago#PredictionMarkets had a banner year in 2025. According to PredictionIndex.xyz, total trading volume for the prediction market sector reached $50.25 billion in 2025. #Kalshi and #Polymarket, the Top 2 players, accounted for 97.5% of the total. Separately, Kalshi reported its total nominal trading volume at $23.8 billion for 2025, which is a year-on-year increase of 1108%. Last year also saw active capital market transactions in the section. Both Polymarket and Kalshi received multi-billion investments, making their valuations exceeding $10 billion. Based on my analysis, eight leading prediction market startups attracted a total of 19 funding rounds in 2024-25. They received over $4 billion in venture capital funding. However, all the headlines aside, trading in prediction markets is still very tiny, especially when comparing it to the Exchange-traded futures market. Let’s look at a single trading day at CME Group, the world’s largest futures Exchange holding company. Data below is selected from CME Group website. Wednesday, January 7, 2026: Asset ClassDaily VolumeOpen Interest Agriculture1,346,914 8,980,766 Energy 3,191,305 15,764,749 Equities 6,213,01110,335,342 FX 621,085 3,304,265 Interest Rate13,394,64872,569,888 Metals 1,710,305 2,471,234 Exchange Total52,954,536226,884,640 The above data table is shown by number of contracts. Different commodity futures and options come with different contract sizes. In order to show an apples-to-apples comparison, I have made the following adjustments: •One commodity contract is selected from each of the six asset classes •Daily trade volume is converted to notional value by multiplying its contract size •Open Interest is multiplied by initial margin to arrive at the total amount for fund deposit Here are the results: •The selected commodities are Corn Futures (ZC), WTI Crude Oil (CL), E-mini S&P 500 Futures (ES), Euro FX ($6E), 3-month SOFR (SR3) and Gold Futures (GC). •On January 7th, these seven futures contracts had a combined daily volume of 6.9 million contracts, which accounted for 13% of CME Group ‘s otal volume. •For the same day, they had a combined Open Interest of 19.4 million contracts, contributing to 8.5% of total Open Interest. •In Notional Value terms, trading for these seven contracts amounted to $676 billion. By this measure, a single day’s trading of selected contracts at CME Group is 12 times bigger than the full year’s trading of all the prediction markets combined. •Traders are required to deposit an initial margin to trade. They are also required to maintain the margin account for all opening positions. Margins deposits for these seven contracts totaled $73.76 billion. Considering these are from 8.5% of the total open interest, margin balance for all contracts at CME Group should be in the hundreds of billions of dollars. Trading the Big Economic Data, a Comparison The Bureau of Labor Statistics released the December Nonfarm payroll report on Friday, January 9, 2026. Prediction markets allow users to wager the unemployment rate and jobs numbers directly in “Yes” and “No” trades. In theory, crowdsourcing reflects the collective wisdom of all market participants. They are making a prediction with skin in the game. Therefore, the result would be more accurate than any expert opinion. On January 9th, seven hours ahead of the report release time, Kalshi currently shows $777K in the unemployment data trade and $433K in the Jobs numbers trade. Nonfarm payroll data will affect the Federal Reserve decision when they meet to decide on interest rates on January 28th. Futures traders use equity index, precious metals and interest rate contracts to predict the economic data and the Fed decision, indirectly. While this sounds less convenient than the prediction markets, it is where market participants put their money at. As shown in the table in the main chart, the S&P 500 futures had daily notional value of $441 billion and open interest of $43.5 billion. The margin deposit of just a single contract is 35,950 times bigger than the Kalshi money pool. Gold futures had daily notional value of $105 billion and open interest of $11.7 billion. Its margin fund is 9,669 times bigger than the Kalshi money pool. The Takeaways In theory, prediction markets would be a great price discovery mechanism for finding out the truth of any information. We have seen this working in areas where there isn’t a tradable instrument present in financial markets. The examples are: •Who will win the Nobel prizes? •Which movie will win the Oscar Best Picture? •How many tweets will Elon Musk send within a week? •Which party will control the Congress in 2026 Midterm elections? •Will the US take military actions at Iran in January 2026? In financial markets, institutions and wealthy investors put the vast majority of their assets in equities, fixed income and derivatives. Recreational traders may put side bets on prediction markets. However, such tiny amount would not have any material impact on how the financial instrument behaves. The more likely impact will be from news media reporting. CNN, CNBC, and Wall Street Journal are all taking prediction market data as a new source of information. At the end, while prediction markets are growing rapidly, they will still be a niche market segment in finance in the foreseeable future. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs https://www.tradingview.com/cme/