CFTC Deems Equity Perpetuals Approved, but U.S. Trading Still Depends on Exchange Rules
Kalshi’s proposed minimum margin would let a customer take a $10, 000 position with $1, 550 in collateral. That is a proposed floor, not a guaranteed rate or a cap on potential losses. The CFTC’s decision opens a path for U.S. equity perpetual futures, but it does not settle every exchange rule or regulatory question.
- The CFTC deemed equity perpetual futures approved under its product-review process.
- The contracts have no fixed expiry and use funding payments, but those payments do not guarantee price tracking.
- They are derivatives, not shares, and do not give holders stock ownership rights.
- SEC review, exchange requirements and concerns about leverage remain relevant.
What the CFTC decision does and does not mean
On Nov. 3, the Commodity Futures Trading Commission said equity perpetual futures tied to individual stocks had been “deemed approved” under its product-review process. The announcement said the contracts could begin trading on qualifying CFTC-registered exchanges. The available account does not specify the year or identify a launch date or the first listed stocks.
“Deemed approved” is a procedural outcome, not a blanket endorsement of every contract or exchange rule. Under Commission Regulation 40.3, the CFTC’s initial review period is 45 days, with provisions for extensions. A product may be treated as approved if that period expires without a notice of non-approval.
The products are classified as security futures under the Commodity Futures Modernization Act of 2000. They fall under the Commodity Exchange Act and federal securities laws, bringing both the CFTC and the Securities and Exchange Commission into the regulatory picture.
A venue seeking to list these products must be a CFTC-designated contract market and register with the SEC as a national securities exchange for security-futures trading. Those requirements are separate from the CFTC’s product-review process. Deemed approval alone does not show that a venue has met every requirement or that trading has begun.
How equity perpetuals are designed to work
Conventional futures have set expiration dates. A perpetual contract does not. The proposed equity products use periodic payments between traders with long and short positions. These funding payments are meant to encourage the contract price to track a reference price for the underlying stock.
Funding does not guarantee a peg. How closely a contract tracks its reference price can depend on the payment formula, market conditions and liquidity. The filings describe funding arrangements, but the available information does not detail the specific calculations, which vary by product.
These contracts are derivatives, not shares. Holding one does not make a trader a shareholder or confer stock ownership rights. Coinbase’s filing also covers cash-settled futures on individual stocks and ETF shares. Those differ from its proposed single-stock perpetuals. Cash settlement means positions are settled in money rather than by delivering the underlying shares.
Proposed terms from Kalshi, Coinbase and Bitnomial
Kalshi, Coinbase Derivatives and Bitnomial filed proposed rules for stock-futures markets. Their proposed margin floors are similar, though they do not apply in the same way to every product or customer.
- Kalshi: Its proposed customer margin floor is 15.50% of a position’s current market value. At that minimum, a $10, 000 position would require $1, 550 in margin, or about 6.45 times exposure. The proposal also sets out perpetual contracts with no preset expiry and funding payments between long and short holders.
- Coinbase: Its proposed margin amendments generally require at least 15% of current market value. A September application outlined plans for more than 50 single-stock perpetuals. Contract-specific materials would set out trading hours, pricing methods and funding arrangements.
- Bitnomial: It proposed a 15.25% customer-margin floor for unhedged positions. Clearing firms and intermediaries could require more collateral.
Kalshi’s proposed rules set minimum thresholds for eligible underlying stocks: a market capitalization of at least $100 billion, more than 20 million shares of estimated deliverable supply, and average daily trading value above $450 million over six months.
Kalshi’s proposed trading schedule runs from Sunday at 6 p.m. Eastern Time to Friday at 5 p.m., with a daily maintenance break from 5 p.m. to 6 p.m. Trading would also stop during a regulatory halt affecting the underlying stock.
Leverage and the limits of the product
Margin is collateral, not the full value of a position. A 15.50% minimum would allow about 6.45 times notional exposure if a customer could trade at that floor. It does not guarantee every customer that margin level, and it does not cap potential losses. Exchanges, clearing firms or intermediaries may require more collateral.
Cboe challenged the exchanges’ approach in an Oct. 14 letter, arguing that stock perpetuals should not be treated as security futures. It urged the SEC to set aside the proposed rule changes and require review through the standard securities-exchange process.
Better Markets raised similar objections in a Nov. 2 statement. Its securities policy director, Benjamin Schiffrin, warned that leverage could quickly wipe out an investor’s deposit and pointed to the lack of stock ownership rights. The distinction matters: a contract linked to a stock is not the stock itself.
SEC review is separate from the CFTC’s 45-day product-review process. Bitnomial’s filing describes a process under which the SEC, after consulting the CFTC, may abrogate its rule change within 60 days of CFTC approval and require it to be resubmitted through the standard review process. The available information does not establish whether the SEC has taken that step.
From Bitcoin contracts to equities
The CFTC’s equity-perpetual decision follows its May 29 approval of Kalshi’s Bitcoin perpetual futures contract, which references Bitcoin’s spot price. In a policy statement issued the same day, the CFTC said perpetual contracts referencing other assets should be reviewed case by case because their features can vary with the underlying market.
That does not amount to a blanket green light for perpetual contracts on every asset. Stocks have distinct trading hours, regulatory halts, liquidity conditions and securities-law questions. The proposed schedules and eligibility rules address some market-specific issues, but objections from Cboe and Better Markets show that the regulatory path remains contested.
Key questions about U.S. equity perpetuals
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Have equity perpetuals begun trading in the U.S.?
The CFTC said qualifying exchanges could begin offering them, but the available information gives no launch date or first listed stocks. Deemed approval does not mean trading is live.
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How do the contracts avoid expiration?
They have no preset expiry. Proposed funding payments are designed to encourage prices to track a reference price, but they do not guarantee that result.
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Do equity perpetuals give traders stock ownership?
No. They are derivatives and confer neither shareholder rights nor ownership of the underlying shares.
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What do the proposed margin levels mean for traders?
They are proposed minimum collateral requirements, not guaranteed terms for every customer. Leverage can magnify losses as well as gains, and intermediaries may require more margin.
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Could the SEC still intervene?
Yes. Bitnomial’s filing describes a process that allows the SEC, after consulting the CFTC, to abrogate its rule change within 60 days of CFTC approval and require resubmission.
The decision creates a regulatory route for trading perpetual contracts tied to individual stocks, but it does not make them equivalent to owning shares or remove the risks of leveraged derivatives. Their practical value will depend on the final contract terms, market safeguards and how regulators resolve the remaining disputes. No fixed expiry does not mean no risk.
