It started in a smoking lounge.
The Chicago Board Options Exchange opened in 1973 in a converted smoking room off the Chicago Board of Trade’s futures floor. Musty, by the founder’s own account, ringed with eight trading posts.¹ Nine hundred and eleven contracts changed hands the first day.² The floor itself didn’t last in that form. Automation crept in through the 1980s and 90s, and most trading is electronic now.³
What stood between an ordinary person and a leveraged trade was never the shouting on the floor. It was the layer in front of it: a broker who would take your call, a margin agreement, an options-approval form, a minimum balance, and the delay and paperwork that came with all of it. That barrier was not wisdom. Nobody was protecting you from yourself on purpose. It was friction — and friction, it turns out, was doing more work than anyone gave it credit for.
+ ACCESS
Speculation and leverage are old. They have produced blowups in every generation that could reach them, and the operative phrase is could reach them. That was always the limiting factor. Not judgment. Access. That limit is coming down, and you can date it.
Last week, on June 22, 2026, regulators cleared the way for 24/7 perpetual-futures trading. Contracts with no expiration, built for continuous leveraged speculation, long available only offshore.
Shares of the legacy exchanges fell on the news.⁴ CBOE, which had hit a 52-week high of $371 on May 19, dropped roughly 28% in a single month to the low $240s, a market cap near $26 billion.⁵ Its peers ICE, CME, and Nasdaq fell too.⁵ Meanwhile the prediction exchange Kalshi — where ordinary users place direct wagers on outcomes — has gone from an $11 billion valuation last December to $22 billion in May to a reported $40 billion target now, in a matter of months.⁶
The incumbents that built the wall are repricing downward; the platforms that removed it are repricing up. As one prominent venture investor put it recently, “speculation is a gateway drug to investing.”⁷ Maybe. But a gateway implies a destination, and not everyone who walks through finds it.
The first accelerant is access. Here’s the second.
+ SYCOPHANTIC AI
Frictions to trading aren’t just institutional. Much of it, especially when it comes to retail trading, is personal. Internal. Hesitation, and an inner monologue that questions whether placing that next trade is a good idea or not. A second guess before clicking ‘submit’ on an order.
But the inner monologue is being replaced by a personalized AI that doesn’t argue, that reflects your conviction back amplified, and which turns every prompt into further conviction that you’re on the right path. Whether it tells the truth is secondary to whether it agrees.
Speculation plus leverage can end in blowups for some share of the people who partake in their use. What’s new isn’t the speculation or the leverage. It’s that the two things that used to slow them down — an outer wall of access, and a soft inner wall of personal decision making — appear to be coming down at the same time. Two brakes, released at once. That doesn’t guarantee a worse outcome. It removes the things that used to make a worse outcome less likely.
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One last thing.
+ IRONY
One of CBOE’s old trading-floor buildings is being converted into a data center. Reportedly chosen in part for how much electricity it can draw.⁸ The institution that used to slow you down is becoming room for more server space.
It started in a smoking lounge, and shifted to a server farm. Make of that what you will.
The goal of this post isn’t to be alarmist or call a top, but to call attention to changes taking place and reinforce the idea that sometimes, there’s value in having friction. Whether it means leaving your phone in another room before you go to bed, or not keeping cookies in your pantry because you know you’ll eat them all too quickly, friction can be used to channel the better angels of our nature.
The market, ever efficient, seems to be busy removing whatever friction it can find. That shifts more responsibility to investors to manage risk and ask themselves where things go from here.
Observations, not investment advice. Views are my own.
Sources
- CBOE founding president Joe Sullivan’s description of the “musty smoking room” and the eight trading posts, from his memoir for the SEC Historical Society: https://www.cboe.com/insights/posts/cboes-beginnings-in-the-words-of-our-founding-president/ — full memoir: https://www.sechistorical.org/collection/papers/2010/2019_02_08_CBOE_Joe%20Sullivan.pdf
- First-day volume (911 contracts, 16 stocks): https://www.marketswiki.com/wiki/Chicago_Board_Options_Exchange — also Chicago Sun-Times 50th-anniversary coverage: https://chicago.suntimes.com/business/2023/4/25/23698183/cboe-global-markets-options-trading-turns-50
- Automation timeline (RAES 1984, EBook 1989, CBOEdirect 2001) and shift from open outcry: https://www.marketswiki.com/wiki/Chicago_Board_Options_Exchange
- June 22, 2026 perpetual-futures approval sending exchange-operator stocks lower: https://www.cnn.com/markets/stocks/CBOE (see “24/7 ‘Perp Futures’ Trading Approval Sends Market Operators Tumbling”)
- CBOE 52-week high ($371.18, May 19, 2026), ~28% one-month drop, ~$26B market cap, and peer declines (ICE, CME, Nasdaq): https://www.tradingview.com/news/zacks:feeb49ac4094b:0-cboe-stock-plunges-28-4-in-a-month-time-to-buy-the-dip/ and https://www.cnbc.com/quotes/CBOE
- Kalshi valuation arc ($11B Dec 2025 → $22B May 2026 → ~$40B target), per Financial Times reporting: https://www.coindesk.com/business/2026/06/24/kalshi-targets-a-massive-usd40-billion-valuation-widening-lead-over-rival-polymarket
- Fred Wilson (Union Square Ventures), “speculation is a gateway drug to investing,” as relayed in Howard Lindzon’s newsletter, June 28, 2026.
- Conversion of CBOE’s former 400 S. LaSalle St. trading-floor building into a data center: https://www.wbez.org/2025/12/16/whats-that-building-chicago-board-options-exchange
