[Xangle Comment] Regulated U.S. Trading Opens for Single-Stock Perpetual Futures

 

1. CFTC Opens Regulated U.S. Trading for Single-Stock Perpetual Futures

Key Developments

• Perpetual futures expand to individual stocks: On November 3, the CFTC announced that single-stock perpetual futures submitted for listing review had been deemed approved under Regulation 40.3. These products are offered on venues registered with the CFTC as designated contract markets (DCMs) and notice-registered with the SEC as security futures exchanges, and are subject to both agencies’ regulatory frameworks.
• Kalshi adds perpetual futures on four stocks: On November 3, Kalshi added perpetual futures on Amgen, Costco, McDonald’s, and Qualcomm. Positions have no scheduled expiration, and funding payments are designed to keep contract prices close to the underlying share prices. Trading hours run from Sunday at 6 p.m. to Friday at 5 p.m. Eastern Time.
• Litigation over product classification and the approval process: The Capital Markets Alliance (CMA), whose members include Cboe and Citadel Securities, filed suit on the day of the announcement seeking to vacate the approvals. While the CFTC classified the products as security futures subject to joint oversight, CMA argues that they are security-based swaps under the SEC’s exclusive jurisdiction. It also challenges the legal explanation and consideration of market impacts in the approval process.

 

Xangle Comment | Joey Kim

The integration of perpetual futures into regulated markets has progressed in stages this year. In May, the CFTC approved the listing of Kalshi’s bitcoin perpetual futures contract, BTCPERP. Kalshi added equity index perpetual futures in October, followed by single-stock perpetual futures on November 3. Coinbase Derivatives and Bitnomial have also pursued U.S. single-stock perpetual futures listings, expanding the range of underlyings into traditional financial assets. This expansion has also encountered opposition from established financial firms and underlying share issuers. In June, CME sued the CFTC over its decision to classify BTCPERP as a futures contract. The dispute concerned whether a contract without an expiration date should fall under the futures or swaps framework. In the tokenized stock market, Microsoft, Nvidia, and other issuers have also objected to third parties tokenizing their shares for trading on OKXICE, the joint venture between OKX and ICE.

Opposition has continued as perpetual futures expand to individual stocks. CMA, whose members include Cboe and Citadel Securities, filed suit on the day of the announcement seeking to overturn the approvals. Even for a venue such as Kalshi that has completed exchange registrations with both the CFTC and SEC, whether these products can be offered as security futures is an issue raised by the litigation. CMA argues that the structure of perpetual contracts makes them security-based swaps, requiring a different regulatory framework. Because the new products could capture some trading demand from existing equity and options markets, the dispute can be viewed as involving commercial interests in market share and revenue alongside investor protection and regulatory jurisdiction.

This change could improve trading efficiency in futures markets and expand the range of assets traded. Cash-settled perpetual futures provide price exposure without requiring the underlying assets to be acquired or delivered in amounts matching the contracts’ notional value. With no need to roll positions at expiration, they can also concentrate liquidity in a single contract rather than divide it across maturities. If sufficient liquidity develops, bid–ask spreads and execution costs could fall, while a broader range of underlyings would expand investment and hedging choices. If trading hours eventually extend through weekends, these markets could also play a larger role in risk management and price discovery while the underlying cash markets are closed.

Investment strategies and financial products built around perpetual futures could become more diverse as well. In crypto markets, investors have used strategies that hold spot assets while shorting perpetual futures on the same asset to reduce price exposure and collect funding payments. Ethena is an example of a service built around revenue generated by such strategies. Equities could similarly see products combining stocks or tokenized shares with perpetual futures, or strategies that seek funding income across multiple stocks. Perpetual futures could become a foundation for new investment strategies and financial products, extending their role beyond short-term trading.

Efforts to connect perpetual futures prices to other financial services are already under way. In its October 29 launch of Chainlink 24/7, Chainlink explained that it connects prices across regular and extended trading sessions and uses quotes from multiple perpetual futures venues when the underlying markets are closed. Prices formed in perpetual futures markets are beginning to feed into tokenized asset trading and collateral valuation. As liquidity develops, collateralized lending and asset management services using these pricing inputs could expand.

The funding-based perpetual futures model developed in crypto markets is now spreading into traditional finance, including equities, and is being traded within the U.S. regulatory framework. Products and trading mechanisms developed in crypto are beginning to influence product design and regulation in established financial markets. This suggests that collateralized lending and automated asset management models developed in DeFi could also find their way into regulated finance. Tokenized securities would gain utility as they connect to these services. The convergence of crypto and traditional finance could reshape existing financial services and create new business opportunities.

 

References

• OKXICE — Issuer objections to third-party tokenized stock trading (November 2 notice)
• SEC — Innovation Exemption FAQ on issuer notices and objections
• CFTC — Statement on equity perpetual futures and joint oversight
• CFTC — Approval of Kalshi’s BTCPERP contract
• CME — Complaint challenging the CFTC’s bitcoin perpetual futures approval
• Kalshi — Launch of four single-stock perpetuals and article image
• Kalshi — Equity index and single-stock product updates
• Kalshi — Single-stock perpetual futures contract terms
• SEC — Acknowledgment of Kalshi’s security futures exchange notice registration
• SEC — Coinbase Derivatives’ filing for single-stock perpetual futures listing rules
• SEC — Bitnomial’s security futures listing rules filing
• CMA — Announcement of lawsuit challenging single-stock perpetual approvals
• Cboe — Participation in CMA litigation and position on product classification
• ICE — Trade[XYZ], Hyperliquid-based markets, and ICE–OKX joint venture distribution
• Ethena — Funding and basis-related revenue model
• Chainlink — Chainlink 24/7 launch and off-hours pricing methodology