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The Commodity Futures Trading Commission said on Nov. 3 that “equity perpetual futures” — leveraged contracts tied to individual stocks with no expiry date — may begin trading on CFTC-registered exchanges, the first time the structure has been allowed in regulated U.S. equity markets. Chairman Michael Selig announced the clearance, according to Decrypt.
The instruments have been a staple of crypto trading venues for years and were previously largely unavailable to U.S. traders, the outlet reported. Selig framed the step as a continuation of an effort he described as onshoring perpetual derivatives, which began with the agency’s earlier clearance of Bitcoin perpetual futures for Kalshi.
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Key facts
- The contracts were deemed approved under CFTC Regulation 40.3 as security futures products under the Commodity Futures Modernization Act of 2000, Decrypt and crypto.news reported.
- Kalshi’s filing sets a minimum customer margin of 15.50% of a position’s market value; Coinbase’s proposal generally requires at least 15%, and Bitnomial’s sets a 15.25% floor for unhedged positions, per crypto.news.
- Kalshi’s stock proposal requires underlying companies to hold at least a $100 billion market capitalization, more than 20 million shares of estimated deliverable supply and $450 million in average daily trading value over six months, crypto.news reported.
- Selig said the contracts fall under joint CFTC and SEC oversight, built on a memorandum of understanding the two agencies signed in March.
- Bitcoin.com News noted that Bitmex launched its XBTUSD perpetual swap in May 2016 and closed this past September.
A crypto instrument moves into equities
Unlike standard futures, perpetual contracts carry no settlement date. A trader can hold a leveraged position indefinitely provided margin and funding obligations are met; long and short holders exchange periodic funding payments linked to the gap between the contract and the underlying stock. Selig called the stock contracts an extension of the agency’s approval of the first true Bitcoin perpetual futures on a regulated U.S. exchange, a milestone Decrypt reported earlier this year.
Eligible venues are designated contract markets that have also registered with the SEC as national securities exchanges for security futures trading, crypto.news reported. Selig credited the March memorandum with resolving jurisdictional friction between the two agencies, which SEC Chairman Paul Atkins had described as a regulatory “no man’s land,” according to Decrypt and Bitcoin.com News.
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The Kalshi filing also sets a trading schedule from Sunday at 6 p.m. Eastern Time through Friday at 5 p.m., with a daily maintenance break from 5 p.m. to 6 p.m., and requires trading to stop during regulatory halts affecting the underlying stock, crypto.news reported. Coinbase’s September application outlined plans for more than 50 single-stock perpetuals, while NYSE parent Intercontinental Exchange announced an Oct. 29 agreement with Trade[XYZ] to build a U.S. market and clearing structure for Hyperliquid-based perpetuals, subject to regulatory approvals.
Objections from Cboe and Better Markets
The approval drew pushback over how the contracts are classified and how much leverage they permit. Cboe argued in an Oct. 14 letter that stock perpetuals should not be treated as security futures and urged the SEC to abrogate the proposed rule changes in favor of standard securities-exchange review, crypto.news reported. Better Markets made a similar case in a Nov. 2 statement, with director of securities policy Benjamin Schiffrin warning that leverage could quickly exhaust an investor’s deposit and noting the contracts carry no ownership rights in the stock.
Bitnomial’s filing states that the SEC may, after consulting the CFTC, abrogate a rule change within 60 days of CFTC approval and require refiling under the standard review process, per crypto.news.
Why it matters
U.S. traders gain a regulated route to a product that previously required offshore platforms, while exchanges including Kalshi and Coinbase Derivatives get a new equity-linked offering alongside their crypto markets. The joint SEC-CFTC framework also sets a template for how future hybrid products are classified.
What to watch
Whether the SEC exercises the 60-day abrogation window cited in Bitnomial’s filing, how Cboe’s request for standard securities-exchange review is handled, and whether ICE’s announced Hyperliquid-based market clears its regulatory approvals.
Sources: Decrypt, crypto.news, Bitcoin.com News
