Opening the 2026 FIA Futures & Options Expo on Election Day, FIA President and CEO Walt Lukken highlighted four issues reshaping markets: the midterm elections, prediction markets, compute futures and perpetual contracts.
Elections have consequences
Lukken said prediction markets point to a rough night for Republicans, driven by voter concern over the war in Iran, affordability and fatigue with Washington drama. If Democrats take both chambers, he expects a shift toward congressional oversight and a slower regulatory agenda.
He drew on his own experience. When oil peaked above $145 a barrel in 2008, he was Acting Chair of the CFTC and testified six times in six weeks, including twice in one day. “The agency’s agenda was consumed by Congressional inquiries,” he said.
Divided government, he added, “does not bode well” for the Clarity Act, the digital asset market structure legislation FIA has backed for two years. Prediction markets put its odds of passing by the end of 2027 at 20%, but “if I were a betting man, I would short that contract.” That leaves the SEC and CFTC to build a framework on thin statutory authority, complicated by a Supreme Court that has curtailed the authority of independent agencies.
Prediction markets: gambling or investing?
Lukken noted that prediction markets have captured the attention of young and old investors alike, and have proven very accurate. But states, Indian Tribes and even the NFL are now pushing to exclude sports gaming from the CFTC’s oversight, while CFTC Chair Mike Selig has defended the agency’s exclusive jurisdiction in court. If reasonable people disagree on the law, Lukken said, Congress should clarify its intent, and if it doesn’t, the courts will.
He called for action on three fronts. On insider trading, he said the industry has “no tolerance for anyone who manipulates our markets,” and he urged clear CFTC guidance and strong enforcement. On self-certification, which saw the number of self-certified contracts triple last year, he said Congress never intended a “check-the-box” exercise, a point he made having helped develop the process in 2000 as a Senate staffer. He welcomed recent CFTC guidance requiring exchanges to show their homework. On leverage, he questioned the value of excessive leverage for purely speculative retail contracts, saying policymakers will need to weigh it carefully. Still, he expects strong demand for these products in the years ahead.
Compute futures
Lukken described compute futures as cash-settled contracts tied to the rental cost of computing capacity, giving AI developers, cloud providers and data centers a way to manage volatile costs. The products are early-stage, but analysts compare their potential size to the oil market. He praised regulators’ focus on how exchanges measure the underlying benchmark, warning that a derivative cannot succeed without a reliable reference price. “Think Libor,” he said.
The perp walk
On perpetual contracts, which mimic an underlying price without expiring, Lukken noted that Nobel laureate Robert Shiller first theorized them in 1992. On-exchange volumes remain low, but their popularity offshore suggests they could capture a material share of global volume. The CFTC has asked the public for feedback on their risks.
He outlined skeptics’ concerns. Without expiration and delivery, there is nothing to force price convergence, so price discovery depends on a funding-rate mechanism that must resist distortion, liquidity shortfalls and manipulation. Hedgers worry about a “tail wagging the dog” effect on underlying markets. Lukken said additional guardrails may be needed around leverage, default management and customer protections, but “if we get the protections right, the potential for broad acceptance is enormous.”
The takeaways
Lukken closed with three points. Markets are as innovative and competitive as he has seen in his thirty years in the industry, which drives lower costs and better products. The industry supports “responsible innovation,” not innovation at any cost. And participants should not be anxious about disruption as long as they stay focused on fundamentals, which he called “our north star.”
Closing Bell
In his lighter closing segment, Lukken noted a University of Chicago student campaign to repeal the CFTC’s prohibition on onion futures, calling it a “many-layered story.” He also announced the FIA Hall of Fame class of 2027, to be inducted in March in Boca: Rob Creamer of Geneva Trading, Paul Cusenza of Nodal Exchange, former FIA executive Emma Davey, Rama Pillai of SGX, former ESMA Chair Verena Ross, and the late Cassandra Seier, honored posthumously.