NEW YORK — For decades, Wall Street has been built on derivatives of stocks, bonds, and commodities. Now, thanks to the booming world of prediction markets, America’s most exciting new asset class is a derivative of something far more precious: the English language, as spoken by public figures.

Federal regulators have opened a probe into so-called “mention markets” — contracts on prediction sites where bettors wager millions of dollars on whether a specific person will say a specific word or phrase. Want to bet on whether President Trump utters a particular term at his next press conference? There is a market for that. Curious whether a soccer sportscaster mentions a certain player’s name? There is a market for that, too, or there was — until Kalshi suspended its sports mention markets amid the regulatory scrutiny.

"This is the purest form of capitalism," said one trader who asked not to be identified, because identifying yourself is not yet a tradeable contract. "You're literally putting your money where someone else's mouth is."

The Commodity Futures Trading Commission is reportedly examining whether these contracts are unusually easy to manipulate — a concern that baffles true believers in market efficiency. Easy to manipulate? The entire point of a free market is that anyone can try to move it, and the market prices that attempt into existence. That is not a flaw. That is the feature.

Critics point to past scandals, such as the more than $1.2 million in bets placed on wildfires during the January 2025 Palisades and Eaton fires, as evidence that prediction markets attract ghoulish speculation. Supporters counter that a market that prices disaster in real time is merely doing its job. Both sides agree that the phrase “you can’t bet on that” has historically been the surest way to make people want to bet on it.

The CFTC probe is the latest chapter in the agency’s long-running relationship with Kalshi, the exchange that spent years fighting for the right to offer election and event contracts, only to find that the real action was in parsing press briefings. Regulators now worry that a well-placed whisper — or an actual placed whisper, in the ear of someone with a microphone — could move markets based on nothing more than a word.

SAMPLE MENTION-MARKET CONTRACTS: A PORTFOLIO GUIDE

  • "Trump says 'tremendous' before the end of his next rally" — currently trading at 92%.
  • "Press secretary uses the word 'unprecedented' in a single briefing" — heavily overbought.
  • "Any senator says 'bipartisan' with a straight face this week" — long shot, huge payout.
  • "Sportscaster mentions 'generational talent' during a primetime game" — essentially risk-free.
  • "Politician uses the phrase 'the American people deserve to know' and reveals nothing" — the bond market of mention markets. Low yield, always settles.

Some say betting on the word choice of public officials is a distraction from real markets and real news. Others say it is the most honest financial product ever invented, because it pays out based on something that demonstrably happens. The truth, as always, lies in a third position I just invented: a country that can price a press conference has achieved a level of financial sophistication that other nations can only dream of — and a level of discourse that they can only laugh at.

At press time, trading volumes in “CFTC commissioner says ‘we take these concerns seriously’” had surged 400 percent, with analysts noting the contract had never lost in the history of American regulation.