Kalshi Launches Stock-Index Perpetual as Prediction Markets Push Into Traditional Finance

Kalshi is moving further beyond predicting who wins an election or a football game and venturing into perpetual futures tied to the stock market. 

The exchange launched a perpetual futures contract Tuesday tied to its US 500 index, which covers 500 of the largest U.S. companies, according to Reuters. The product allows long or short exposure without owning the underlying shares and follows an August regulatory filing for equity-index perpetuals.

The launch puts Kalshi in more direct competition with traditional derivatives exchanges. It also follows a similar expansion by Polymarket, which introduced international perpetual futures in September across crypto, stocks, indexes and commodities.

Both prediction markets are building businesses that extend well beyond yes-or-no event contracts.

No expiration, ongoing costs

A perpetual future does not have the scheduled expiration date of a conventional futures contract. Traders can maintain a position without periodically replacing an expiring contract with a later-dated one.

But “no expiration” does not mean there is no cost to holding it.

Kalshi says funding payments between long and short traders help keep the contract’s price aligned with its underlying index. Depending on the funding rate and which side they hold, traders can pay or receive those payments. 

That creates a different calculation from simply buying an index fund: A trader can correctly predict the market’s direction and still have returns reduced by funding costs and trading fees.

The new contract also provides derivative exposure, not ownership of the companies it tracks. Reuters identified the benchmark as Kalshi’s US 500.

Leverage changes the risk

The contract lets investors take leveraged positions in either direction, making it a different proposition from Kalshi’s familiar fully funded event contracts.

Leverage increases exposure relative to the cash committed. It magnifies gains and losses, and an adverse move can force a position to close before the trader can wait for a recovery. Kalshi’s educational materials describe automatic liquidation when losses approach the amount posted.

Reuters’ launch report does not specify the US 500 contract’s maximum leverage or funding schedule. Limits and intervals published for Kalshi’s other perpetual products should not be assumed to apply to this one.

The important distinction is straightforward: A position may have no scheduled expiration, but it still must survive market moves, collateral requirements and funding costs.

Polymarket moves into commodities

Kalshi is not alone in broadening its product suite.

Polymarket launched perpetual futures on Sept. 3, including commodity contracts tied to Brent crude, West Texas Intermediate crude, gold and silver. The wider rollout spans cryptocurrencies, individual stocks and equity indexes, with leverage of up to 20 times on selected assets.

Those products differ from Polymarket’s fixed-outcome questions about whether an asset will hit a particular price. Perpetuals offer ongoing exposure to price movements rather than a single yes-or-no settlement.

The regulatory distinction is just as important. Polymarket’s perpetuals are offered through its international platform and are unavailable to U.S. traders. They are separate from Polymarket US, its Commodity Futures Trading Commission-regulated exchange.

Kalshi’s stock-index launch therefore adds another dimension to the rivalry. Both companies are expanding toward continuous financial-market trading, but through different structures and for different customer bases.

Beyond the prediction markets label

For Kalshi, the US 500 product follows a perpetual futures lineup that already includes cryptocurrencies and precious metals. It gives customers another reason to use the exchange between the elections, games and economic releases that drive its event-contract business.

The company has also filed proposed rules for perpetual futures tied to individual stocks and exchange-traded funds, including Apple, Nvidia and SPY. Those proposed security futures products require separate regulatory treatment and should not be confused with Tuesday’s stock-index launch.

The direction is clear: Kalshi wants to compete for customers already trading futures, options and crypto derivatives, not only those looking to take a position on a discrete event.

That expansion also raises a practical test. A new product needs enough counterparties to enter and exit positions to be useful. For perpetuals, the trading experience depends on funding costs and liquidation mechanics as well as the underlying market’s direction.

Separate from the sports fight

Kalshi’s financial expansion comes while courts continue to question its sports event business.

The Ninth Circuit Court of Appeals’ Nevada ruling held that Kalshi’s sports contracts were likely not swaps protected from state gambling enforcement. A separate Ninth Circuit decision found that two California tribes were likely to prevail in challenging sports contracts entered into from their lands under the Indian Gaming Regulatory Act.

Neither ruling decides the status of Tuesday’s stock-index product. They concern different underlying activity and legal questions.

That leaves Kalshi pursuing two tracks: defending its ability to offer sports event contracts while expanding into more conventional financial exposure. Polymarket’s commodity and equity perpetuals show that the broader industry is making a similar calculation.

Prediction markets brought these platforms an audience. Perpetual futures give them a way to compete for a much wider share of that audience’s trading, but eliminating the expiration date does not eliminate the risk.