CFTC Just Opened America’s Stock Market to Perpetual Futures

Futures contracts that track individual US stocks and never expire can now trade on American regulated exchanges. The Commodity Futures Trading Commission (CFTC) cleared these equity perpetual futures on Tuesday, a product Americans previously had to seek out offshore.

The catch is leverage. Kalshi, one of the exchanges that filed to list the contracts, lets traders hold a stock position by posting 15.5% of its value, and a Washington reform group warns such positions liquidate automatically in steep sell-offs.

How Do Equity Perpetual Futures Work?

Ordinary futures expire on a fixed date. Perpetual futures roll on indefinitely, so a trader can hold a position for as long as the margin lasts.

A recurring funding payment keeps the contract close to the share price. In the design filed by Coinbase Derivatives, buyers pay sellers when the contract trades above the stock, at up to 0.10% an hour.

Kalshi’s September 18 filing lists 58 contracts. They cover 55 stocks, including Apple, Tesla, Nvidia, and Microsoft, plus Alibaba’s US shares and two funds tracking the S&P 500 and Nasdaq-100.

Trading runs from Sunday evening to Friday afternoon, US Eastern time. Holders get price exposure only, with no shares, dividends, or voting rights, according to Better Markets.

Why Did the CFTC Let Them Through?

The contracts were “deemed approved” under Regulation 40.3, a rule that clears a new product once the CFTC’s 45-day review window passes. Chairman Michael Selig’s statement classifies them as security futures, so the SEC shares oversight.

Only exchanges also registered with the SEC to trade such products can list them. The move follows the CFTC’s May approval of a bitcoin perpetual contract on Kalshi.

“…rather than being forced to turn to offshore, and often unregulated, venues,” the CFTC said in a statement.

How Much Can Traders Lose?

Benjamin Schiffrin, director of securities policy at Better Markets, wrote on November 2 that offshore single-stock perpetuals offer up to 20x leverage. SEC-approved single-stock ETFs are generally capped at 2x.

US versions would reportedly allow up to 6x. By the group’s math, a 20% drop wipes out a 5x position.

“…a gambling tool masquerading as a legitimate financial instrument”

Incumbents are pushing back too. CME Group is already suing the CFTC over its approval of crypto perpetuals.

Meanwhile, the race for these traders is widening. Intercontinental Exchange, owner of the New York Stock Exchange, plans 24/7 US futures on Hyperliquid. Early volumes on the new stock contracts will show whether offshore demand moves home.