Key Takeaways
- • The CFTC cleared equity perpetual futures on Tuesday, allowing futures contracts tracking individual US stocks that never expire to trade on American regulated exchanges, per BeInCrypto.
- • Kalshi's September 18 filing lists 58 contracts covering 55 stocks, including Apple, Tesla, Nvidia, and Microsoft, plus Alibaba's US shares and two funds tracking the S&P 500 and Nasdaq-100.
- • Kalshi allows traders to hold stock exposure by posting 15.5% of contract value, a leverage level Better Markets warns can trigger automatic liquidation in steep sell-offs.
- • Contracts were 'deemed approved' under Regulation 40.3 after the CFTC's 45-day review window passed, and are classified as security futures so the SEC shares oversight.
- • Only exchanges also registered with the SEC can list the products, and incumbents including CME Group are already litigating against the CFTC over its crypto perpetuals approval.
Summary
The Commodity Futures Trading Commission cleared equity perpetual futures on Tuesday, giving US investors access on regulated exchanges to a product previously available mainly offshore. Perpetual futures differ from conventional futures in that they have no expiration date, so a position can be held as long as margin is maintained. A recurring funding payment keeps the contract price close to the underlying share price; in the design filed by Coinbase Derivatives, buyers pay sellers when the contract trades above the stock, at up to 0.10% per hour.
Kalshi's September 18 filing lists 58 contracts covering 55 stocks, including Apple, Tesla, Nvidia, and Microsoft, along with Alibaba's US shares and two funds tracking the S&P 500 and Nasdaq-100. Trading runs from Sunday evening to Friday afternoon Eastern time. Holders receive price exposure only, with no shares, dividends, or voting rights, according to Better Markets.
The contracts were deemed approved under Regulation 40.3, which clears a new product once the CFTC's 45-day review window passes. CFTC Chairman Michael Selig's statement classifies them as security futures, so the SEC shares oversight, and only exchanges also registered with the SEC may list them. The move follows the CFTC's May approval of a bitcoin perpetual contract on Kalshi. The CFTC said in a statement that the approval means traders no longer need to turn to offshore, and often unregulated, venues.
Leverage is the central concern. Kalshi lets traders hold a stock position by posting 15.5% of its value. Benjamin Schiffrin, director of securities policy at Better Markets, wrote on November 2 that offshore single-stock perpetuals offer up to 20x leverage, versus a 2x cap on SEC-approved single-stock ETFs, and that US versions would reportedly allow up to 6x. By the group's calculation, a 20% drop would wipe out a 5x position.
Incumbents are contesting the change. CME Group is already suing the CFTC over its approval of crypto perpetuals. Intercontinental Exchange, owner of the New York Stock Exchange, plans 24/7 US futures on Hyperliquid, indicating growing competition for these traders. Early volumes on the new stock contracts will show whether offshore demand shifts onshore.
Kalshi's September 18 filing lists 58 contracts covering 55 stocks, including Apple, Tesla, Nvidia, and Microsoft, along with Alibaba's US shares and two funds tracking the S&P 500 and Nasdaq-100. Trading runs from Sunday evening to Friday afternoon Eastern time. Holders receive price exposure only, with no shares, dividends, or voting rights, according to Better Markets.
The contracts were deemed approved under Regulation 40.3, which clears a new product once the CFTC's 45-day review window passes. CFTC Chairman Michael Selig's statement classifies them as security futures, so the SEC shares oversight, and only exchanges also registered with the SEC may list them. The move follows the CFTC's May approval of a bitcoin perpetual contract on Kalshi. The CFTC said in a statement that the approval means traders no longer need to turn to offshore, and often unregulated, venues.
Leverage is the central concern. Kalshi lets traders hold a stock position by posting 15.5% of its value. Benjamin Schiffrin, director of securities policy at Better Markets, wrote on November 2 that offshore single-stock perpetuals offer up to 20x leverage, versus a 2x cap on SEC-approved single-stock ETFs, and that US versions would reportedly allow up to 6x. By the group's calculation, a 20% drop would wipe out a 5x position.
Incumbents are contesting the change. CME Group is already suing the CFTC over its approval of crypto perpetuals. Intercontinental Exchange, owner of the New York Stock Exchange, plans 24/7 US futures on Hyperliquid, indicating growing competition for these traders. Early volumes on the new stock contracts will show whether offshore demand shifts onshore.
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