Smarkets Board of Trade Exchange LLC

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Smarkets Board of Trade Exchange LLC
Smarkets Logo.jpg
Founded 2025
Headquarters Wilmington, Delaware, United States
Key People Jason Trost, chief executive officer; Tom Hardman, chief financial officer
Products Event-based futures and options contracts; prediction event contracts; electronic order book trading
LinkedIn Profile
Website https://smarkets.com
Releases Company News
Blog https://smarkets.com/about/

Smarkets Board of Trade Exchange LLC is a pending U.S. designated contract market applicant that plans to operate as an electronic event-based derivatives exchange under the name Smarkets Exchange, specializing in listed futures and options on economic indicators, political outcomes and other event contracts for U.S. market participants.[1] The company seeks authorization from the U.S. Commodity Futures Trading Commission (CFTC) to list standardized, centrally cleared contracts that mirror prediction-market style event trading within the Commodity Exchange Act framework.[2]

The exchange is affiliated with London-based Smarkets Limited, which operates a regulated betting and prediction platform in Europe, and intends to adapt that model to a U.S. on-exchange environment using a central order book and electronic trading infrastructure focused on time/price priority.[3] Its proposed contracts are expected to serve hedging and speculative use cases for asset managers, institutional investors, proprietary trading firms and other professional participants seeking listed exposure to event risk and associated price discovery, liquidity and risk management tools.[4]

History[edit]

Smarkets Board of Trade Exchange LLC was formed as a Delaware domestic limited liability company on August 19, 2025, as part of a strategy to establish a U.S.-regulated venue for event-based derivatives linked to the existing Smarkets prediction and betting business in Europe. The founding followed more than a decade of operation by Smarkets Limited in the United Kingdom, where it developed an online exchange platform that applied financial market microstructure concepts to betting on sports and politics.[5]

In early 2026, the company submitted a Form DCM application to the CFTC seeking designation as a contract market under Section 5 of the Commodity Exchange Act and Part 38 of CFTC regulations, with the filing recorded under DCM application number 59862 and the public record showing its status as “Pending.”[6] The application documents, including a public Form DCM, a rulebook marked as Exhibit M and core principles narratives in Exhibit L, outline the proposed governance arrangements, match engine design, market surveillance framework, and compliance and anti-money laundering controls required of a U.S. exchange under CFTC oversight.[7]

The emergence of Smarkets Board of Trade Exchange LLC came amid broader developments in U.S. event contract regulation, including CFTC reviews of political event contracts and prediction markets, and followed the designation and subsequent growth of other event-focused venues such as Kalshi. Within this environment, Smarkets Board of Trade Exchange LLC positioned its proposed business as a centralized exchange for standardized event contracts that would be cleared through central counterparties and subject to the core principles applicable to designated contract markets, rather than as a pure online betting platform.[8]

Founders and senior leaders from Smarkets Limited, including chief executive Jason Trost, played prominent roles in the conception of the U.S. exchange project, drawing on their experience designing an exchange-style engine for matching bets and translating that into listed futures and options contracts settled through U.S. clearing arrangements.[9] Their efforts reflected a trend of technology-driven firms moving from unregulated or gambling-regulated prediction platforms into CFTC-regulated markets, seeking to import approaches to price discovery, liquidity provision and low-cost trading into the listed derivatives space.[10]

As of March 2026, the application of Smarkets Board of Trade Exchange LLC remained under CFTC review, with the public docket indicating its pending status and providing access to non-confidential exhibits, while certain detailed business and technology plans were submitted under confidential treatment requests in Exhibit U.[11] The outcome of the designation process will shape the timetable for any launch of trading on the proposed platform and determine its eventual role in the registered U.S. derivatives ecosystem alongside other DCMs and swap execution facilities.[12]

Products and Services[edit]

The proposed Smarkets Exchange platform is designed to list event-based futures and options contracts that settle to binary or scaled payoffs based on the occurrence or non-occurrence of specified economic, political or financial benchmarks, such as election outcomes, macroeconomic data releases or other quantifiable events.[13] These contracts would be cash settled through designated clearing arrangements, with contract specifications that define event triggers, expiration times, tick sizes and position limits to support orderly price discovery and risk management by market participants.[14]

The exchange’s platform architecture uses an electronic central limit order book and match engine derived from the Smarkets betting exchange, supporting continuous electronic trading with strict time/price priority for order execution. It aims to process high average daily volume of small, standardized contracts.[15] This structure is intended to enable tight bid-ask spreads and deep liquidity at multiple price levels, providing transparent trading conditions for users accustomed to prediction markets as well as traditional derivatives venues.[16]

In addition to political and macroeconomic event contracts, the product design framework could support listed derivatives tied to indices derived from bitcoin and other cryptocurrencies, interest rate benchmarks, or other benchmark indicators, subject to CFTC approval and consistency with event contract policy.[17] The firm’s background in sports and political prediction markets gives it experience in modeling open interest and payoff structures on binary outcomes, which may be repurposed for regulated futures markets where banks, swap dealers, asset managers and other professional users seek to hedging event risk that is not easily addressed through traditional bond, equity or swaps instruments.[18]

Because Smarkets Board of Trade Exchange LLC proposes to operate as a DCM rather than a swap execution facility, its contracts are expected to clear through one or more registered central counterparties, with settlement processes designed to minimize counterparty credit exposure and align with CFTC requirements and, where relevant, international standards influenced by bodies such as ESMA. The rules and surveillance program outlined in its rulebook describe trade reporting, position monitoring, and disciplinary procedures that integrate with clearing and post-trade processes to support market integrity and reliable price discovery.[19]

The firm’s market structure combines features common to prediction platforms and listed derivatives exchanges, including support for order types that emulate VWAP-style execution strategies and tools for asset managers and institutional investors who may wish to trade event risk alongside more traditional portfolios.[20] By standardizing event contracts and integrating them into an exchange and clearing framework, the platform aims to allow event exposures to be measured and managed using the same risk management terminology and processes applied to existing futures and options positions at other DCMs and clearinghouses.

Market structure and participants[edit]

Smarkets Board of Trade Exchange LLC is designed to operate a single order book where all participants interact on a level playing field, with no internalization or dealer-driven quote system and executions determined solely by posted prices and time/price priority.[21] The architecture reflects the firm’s origins in peer-to-peer betting exchanges and is intended to emphasize transparency in matching and trade reporting for professional and retail users alike.[22]

Key users of the exchange are expected to include proprietary trading firms that supply liquidity and arbitrage mispricings across event markets, as well as asset managers, institutional investors and banks that use listed contracts for hedging exposures to political, macroeconomic or digital asset events that affect broader portfolios.[23] Swap dealers and other intermediaries may also use the market to lay off risk from bilateral swap and swaps transactions whose payoff profiles are sensitive to the same underlying events, thereby integrating event contracts into a wider risk management toolkit and supporting price discovery across related markets.

Key People[edit]

Board of Directors[edit]

  • Jason Trost – Chair of the Board and Chief Executive Officer of Smarkets Board of Trade Exchange LLC and founder of Smarkets Limited.[24]
  • Tom Hardman – Director and Chief Financial Officer[25]

Executive Management[edit]


References[edit]

  1. ↑ Designated Contract Markets (DCM): Smarkets Board of Trade Exchange LLC. U.S. Commodity Futures Trading Commission.
  2. ↑ Smarkets Seeks CFTC Approval to Launch Regulated US Prediction Market. US iGaming Hub.
  3. ↑ About Smarkets. Smarkets.
  4. ↑ Smarkets Betting Exchange US Launch Details. RotoGrinders.
  5. ↑ Smarkets Limited Annual Report and Financial Statements 2020. Smarkets.
  6. ↑ Designated Contract Markets (DCM): Smarkets Board of Trade Exchange LLC. U.S. Commodity Futures Trading Commission.
  7. ↑ Smarkets Board of Trade Exchange LLC Exhibit M Rulebook. U.S. Commodity Futures Trading Commission.
  8. ↑ Smarkets Seeks CFTC Approval to Launch Regulated US Prediction Market. US iGaming Hub.
  9. ↑ How Much Did Smarkets Raise? Funding and Key Investors. Clay.
  10. ↑ Team Smarkets. Smarkets.
  11. ↑ Smarkets Board of Trade Exchange LLC Exhibit G Organizational Documents. U.S. Commodity Futures Trading Commission.
  12. ↑ Trading Organizations Overview. U.S. Commodity Futures Trading Commission.
  13. ↑ Smarkets Seeks CFTC Approval to Launch Regulated US Prediction Market. US iGaming Hub.
  14. ↑ Smarkets Board of Trade Exchange LLC Exhibit M Rulebook. U.S. Commodity Futures Trading Commission.
  15. ↑ About Smarkets. Smarkets.
  16. ↑ Smarkets Betting Exchange US Launch Details. RotoGrinders.
  17. ↑ Politics Markets. Smarkets.
  18. ↑ Smarkets Limited Annual Report and Financial Statements 2020. Smarkets.
  19. ↑ Smarkets Board of Trade Exchange LLC Exhibit M Rulebook. U.S. Commodity Futures Trading Commission.
  20. ↑ Smarkets Company Profile. LinkedIn.
  21. ↑ Smarkets Board of Trade Exchange LLC Exhibit M Rulebook. U.S. Commodity Futures Trading Commission.
  22. ↑ About Smarkets. Smarkets.
  23. ↑ Smarkets Betting Exchange US Launch Details. RotoGrinders.
  24. ↑ Smarkets Limited Annual Report and Financial Statements 2020. Smarkets.
  25. ↑ Team Smarkets. Smarkets.
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