CFTC Opens Door to Stock Perpetual Futures as Kalshi Prepares Launch

Perpetual futures are moving further into the U.S. stock market.

Commodity Futures Trading Commission Chairman Michael Selig said Tuesday that perpetual futures tied to individual stocks can begin trading on qualifying U.S. exchanges for the first time.

The contracts must trade on venues registered with the Commodity Futures Trading Commission (CFTC) as designated contract markets and be notice-registered with the Securities and Exchange Commission to offer security futures.

The announcement opens another product category for companies expanding beyond election and sports contracts. A Kalshi representative told MarketWatch that the exchange plans to launch equity perpetual futures in the coming days.

Selig framed the development as an effort to bring products into regulated domestic markets rather than leave U.S. traders seeking access offshore.

“I believe that bringing these types of innovative products into our regulated markets ensures that American investors and traders can access these products within the protections of the CFTC’s proven regulatory framework, rather than being forced to turn to offshore, and often unregulated, venues,” he said.

Stock perpetuals bring joint CFTC-SEC oversight

The contracts were “deemed approved” under CFTC Regulation 40.3 as security futures products, according to Selig’s statement. They are therefore subject to applicable requirements under the Commodity Exchange Act, federal securities laws and both agencies’ regulatory frameworks.

That is an important distinction from a blanket authorization for any prediction market to offer stock trading. A CFTC registration alone is not enough: The exchange also needs the relevant SEC notice registration for security futures.

Selig described the development as building on the Commodity Futures Modernization Act of 2000 and the agencies’ memorandum of understanding. His announcement did not identify individual exchanges, stock tickers or launch dates.

“For too long, regulatory uncertainty left innovative products, such as security futures and equity perpetual futures, stranded in what SEC Chairman Paul S. Atkins has aptly described as a regulatory ‘no man’s land’ due to a lack of harmonization between the agencies,” Selig said.

What traders are buying, and what they are not

Perpetual futures provide exposure to an underlying asset’s price without a fixed expiration date. Unlike conventional futures, traders do not need to roll their position into a later-dated contract simply because the current one expires.

They are derivatives, not purchases of the underlying stock. They also differ from the binary event contracts that made Kalshi and Polymarket prominent: An election contract settles based on whether a specified outcome occurs, while a stock perpetual tracks price exposure over time.

The absence of an expiration date does not eliminate risk. Perpetuals can involve leverage, increasing both potential gains and losses. A trader’s ability to maintain a position still depends on meeting the contract’s collateral and other requirements.

The regulatory announcement is consequently a change in access, not an assurance that the products are suitable for every retail trader.

Another step in Kalshi’s broader exchange ambitions

Kalshi submitted its perpetual security futures proposal to the CFTC in September. Tuesday’s development creates a route for those products to reach the market under the joint regulatory framework.

It follows the exchange’s move into stock-index perpetuals, covered in DeFi Rate’s earlier US 500 report. Index exposure and single-stock exposure are distinct products. Tuesday’s announcement specifically addresses perpetual futures on individual equity securities.

The timing also fits Kalshi’s latest fundraising pitch. The company announced a $1 billion Series G at a $40 billion valuation last week, identifying single-stock perpetuals, indices, compute markets and institutional adoption among its expansion priorities.

The investment case increasingly extends beyond taking positions on discrete events. Kalshi is building toward a broader derivatives exchange, with products that put it into closer competition with established financial-market operators.

Regulatory clarity does not mean the disputes are over

The expansion already faces opposition from an established exchange.

CME sued the CFTC in June over its decision to allow Kalshi and Coinbase to offer cryptocurrency perpetual futures, arguing that the agency exceeded its legal authority. The CFTC rejected that allegation. That lawsuit concerns the earlier crypto-perpetual decisions, not a ruling invalidating Tuesday’s equity announcement.

The equity development is also separate from the state-by-state litigation over sports event contracts. Joint CFTC-SEC treatment of security futures does not itself resolve whether state gambling laws can restrict sports prediction markets.