David López Mateos

Compute options will be as transformative to the US AI industry as compute futures. Sellers and buyers of compute won't only use options for insurance, they'll write options and get paid. Covered calls and cash-secured puts: Compute sellers: covered calls Compute sellers such as neoclouds are long inventory: racks of accelerators that will be rented out over the coming years. Against the capacity they already own, they can write covered calls on GPU-hour prices above today's market and collect the premium as income. If prices stay flat or drift lower, they keep the premium as yield on top of their rental revenue. If prices rise above the strike price at expiration, they rent out capacity at the strike price while still keeping the premium. The upside beyond the strike is capped, but in return the seller converts a portion of future GPU price volatility into present cash. At each expiry, the seller can keep writing calls against inventory, harvesting premium from a depreciating asset. Compute buyers: cash-secured puts Compute buyers such as frontier model companies and AI labs are short inventory, looking to acquire rental time on GPUs. Buying futures locks in their effective price, and buying calls insures against rising prices. But there's another important derivatives trading strategy for compute buyers: writing cash-secured puts. If there's a price below the prevailing GPU rental rate that a buyer would be happy to pay, they can sell a put at that strike and immediately collect the premium as income. If prices rise, they keep the premium when the put expires out of the money. If prices fall to the strike or below, they effectively buy compute at the lower price, partially subsidized by the premium they collected. Both strategies, executed with discipline and proper risk management, generate income while the worst-case exercise scenarios align with the natural hedge. In summary: • Futures: lock in the forward price of compute. • Buying options: insure against adverse moves in GPU prices. • Selling covered calls or cash-secured puts: generate income where exercise aligns with the natural hedging outcome. These strategies are hallmarks of mature US derivative markets facilitated by CFTC oversight. The American Innovation Exchange and our industry partners are ready to support compute as a US-developed asset class from the beginning.

US Compute Futures As Hedges Compute futures face the argument that if a future doesn’t track the exact costs hedgers incur, it will carry too much basis risk to form a viable market. This fundamentally misrepresents how hedges actually function in many major US markets. A hedge does not need to be perfect in order to be useful, let alone transformative, to its underlying commodity market. To be viable as a multi-billion dollar market, a hedging instrument needs to remove enough risk at scale to be worth its initial cost. If the correlation between a hedging instrument and the portfolio is ρ and the optimal hedge ratio is used, the fraction of variance eliminated by the hedge is ρ². A correlation of only 0.7 cuts variance in half. Cross-hedges built on loose relationships predominate in the real US economy. Airlines hedge jet fuel with crude. Bond desks hedge rate risk in credit with treasuries. Long-short equity portfolios hedge market beta with S&P 500 futures. At my former firms Jane Street and Citadel Securities, every trading desk was required to hedge portfolio factors with related instruments intraday and overnight to isolate alpha. Commodity markets are typically heterogeneous. Compute is not a unique underlying in this respect. An “H100 hour” could represent many different goods: SXM or PCIe, spot or reserved, hyperscaler or neocloud, US or Asia. Weigh this “problem” against the “solution” that compute buyers and sellers have today: nothing. Asset-backed loans on GPUs carry 40-50% haircuts because lenders can’t transfer the associated risks. The institutions financing the >$1T datacenter-linked debt sector regularly transact in other heterogeneous commodity markets. The success of US compute futures/options markets primarily depends on CFTC-regulated exchanges’ agility and competency at collaborating with index providers native to chip configurations, neocloud procurement, and timeseries interpolation on a continuous basis. Designing a futures contract that minimizes basis risk and maximizes liquidity formation is an antecedent requirement. Fulfilling the US government mandate to “accelerate the maturation of a healthy financial market for compute” is the main goal.

The typical neocloud operator we speak to says some version of: “I’ve sold out 12 months of capacity on my H200 cluster, but I don’t know what compute prices will be in months 13-24.” Futures solve this, but the suitability of the hedge depends on the index. More below ↓

Compute futures indexes need to be broad enough to capture private cloud transactions but narrow enough to minimize basis risk for datacenter hedging. Architect’s Nvidia H100, H200, B200, and B300 futures will offer the best of both worlds on the American Innovation Exchange.

Compute futures indexes need to be broad enough to capture private cloud transactions but narrow enough to minimize basis risk for datacenter hedging. Architect’s Nvidia H100, H200, B200, and B300 futures will offer the best of both worlds on the American Innovation Exchange.