Look, I get it. When someone starts talking about “financial exchanges” and “network effects,” your eyes probably glaze over faster than a Krispy Kreme donut. But stick with me here, because these three companies have figured out something brilliant: how to make money every time other people make (or lose) money.
Think of it like owning the casino instead of gambling in it. Except these casinos are totally legal and way more profitable.
CME Group (CME): The OG Money Machine
Back in the 1800s, some Chicago merchants got tired of people arguing over butter quality (yes, really – they had professional butter tasters). So they created what eventually became CME Group, and now it’s basically the king of futures trading.
Here’s the beautiful part: CME has a monopoly on some of the biggest trading contracts in the world. They control 95% of U.S. interest rate futures and 100% of S&P 500 futures. That’s like owning the only toll booth on the busiest highway in America.
When markets get crazy (hello, 2025), trading volume explodes, and CME just sits there collecting fees on every single trade. The stock jumped 25% earlier this year before settling at a 14% gain. Not bad for a company that’s basically printing money.
Cboe Global Markets (CBOE): The Options Queen
Remember when the SEC thought stock options were basically gambling? Well, they weren’t entirely wrong – but that didn’t stop Cboe from turning that “gambling” into a $50+ billion business.
Cboe started in a former smoking lounge (I’m not making this up) and now controls 99% of index options trading. They own the VIX – you know, that “fear index” that financial news loves to obsess over. Every time someone wants to bet on market volatility, Cboe gets a cut.
The company’s up 24% this year, and here’s the kicker: zero-day options (basically financial lottery tickets that expire the same day) have become wildly popular. It’s like if scratch-offs suddenly became a Wall Street thing. Cboe is laughing all the way to the bank.
Robinhood Markets (HOOD): The Millennial Money Magnet
Ah, Robinhood – the app that convinced an entire generation that trading stocks should be as easy as ordering DoorDash. Love it or hate it, they’ve figured out how to make day trading addictive (and profitable for them).
The stock’s up 30% since getting flagged by AI systems earlier this year. But here’s where it gets interesting: Robinhood is diving headfirst into prediction markets. Think fantasy sports, but for literally everything – elections, weather, whether your favorite celebrity will get canceled next week.
This market could hit $80 billion by 2030, and Robinhood is positioning itself to be the go-to platform. Sure, it’s riskier than the other two (they’ve paid millions in fines), but sometimes the biggest risks come with the biggest rewards.
The Bottom Line
These companies have cracked the code: they make money whether markets go up, down, or sideways. They’re the house, and as we all know, the house always wins. In a world where everything feels uncertain, betting on the companies that profit from uncertainty isn’t the worst strategy.
Just remember – past performance doesn’t guarantee future results, but owning the infrastructure that everyone else depends on? That’s a pretty solid moat.