CME Group’s Adjusted Interest Rate Total Return Futures Hit 1M Open Interest
CME Group has announced that its Adjusted Interest Rate (AIR) Total Return futures have set a new milestone, with open interest surpassing 1 million contracts, equivalent to $365 billion notional. The achievement, recorded on September 11, also included a single-day volume record of 109,000 contracts, or $40 billion notional. The growth underscores strong institutional adoption of the product, which was designed to provide capital efficiency and risk management benefits for equity index exposure.
In 2025, average daily volume (ADV) in AIR has climbed to 25,000 contracts, representing an 80% year-over-year increase. This trajectory highlights the rapid pace at which institutional investors are embracing the product suite as an alternative to traditional total return swaps. With continued volatility in financing markets and heightened demand for balance sheet efficiency, AIR contracts are increasingly viewed as a scalable answer.
The growth is particularly notable given the broader regulatory and market backdrop. As capital requirements for banks and dealers tighten, platform-traded futures are offering greater transparency and clearing benefits compared to over-the-counter (OTC) contracts. The record numbers suggest AIR futures are filling a critical gap in equity financing markets.
Takeaway
Why Investors Are Turning To AIR Futures
According to Paul Woolman, Global Head of Equity Products at CME Group, the demand reflects a shift in how institutions access index returns. He noted: “More institutional investors are turning to our AIR Total Return futures to access U.S. index returns while mitigating interest rate, balance sheet and counterparty risks. These products provide a cost-effective alternative to OTC total return swaps and allow clients to better manage their equity financing risk by trading calendar spreads along the entire financing curve.”
The design of AIR futures is based on the Effective Federal Funds Rate, giving investors a standardized way to adjust for financing costs within the futures framework. By embedding financing costs directly into futures contracts, participants can avoid the counterparty and margining complexities typical of swap agreements. For institutions viewking scalable, cleared exposure, this provides both efficiency and predictability.
Beyond risk management, AIR futures are also viewn as a strategic tool for optimizing equity financing. The ability to trade across the entire financing curve allows for nuanced hedging strategies that were previously limited to swap markets. For , this flexibility is particularly valuable during periods of rate volatility or regulatory tightening.
Takeaway
Product Coverage And Market Outlook
The AIR Total Return futures suite is available on major U.S. equity indices, including the S&P 500, Nasdaq-100, Rustrade 1000, Rustrade 2000, and Dow Jones Industrial Average. Additionally, CME Group has introduced contracts based on the Secured Overnight Financing Rate (SOFR) for the S&P 500, further broadening the product’s reach. This diversity of indices gives institutions multiple avenues to structure exposure based on their strategies and benchmarks.
With the market for total return swaps continuing to evolve under regulatory scrutiny, platform-traded alternatives like AIR futures are well-positioned to capture additional flow. The growth trajectory viewn in 2025 suggests that further adoption could accelerate, particularly if regulatory contracts. The record-setting volumes also illustrate the increasing comfort institutions have with futures-based answers for financing and hedging.
As CME Group continues to expand its equity product suite, AIR futures are likely to play a pivotal role in how investors access and manage index exposure. Their ability to deliver capital efficiency while mitigating counterparty and balance sheet risks aligns with the needs of modern institutional portfolios, particularly in an era of heightened market and regulatory complexity.
Takeaway
