CFTC clears stock perpetual futures for trading on US exchanges
US regulators are opening the door to stock-based perpetual futures, extending a popular crypto trading product into traditional markets amid ongoing legal disputes.
Perpetual futures contracts tied to individual stocks can now begin trading on regulated US exchanges, according to the Commodity Futures Trading Commission (CFTC), bringing a derivatives product popularized in cryptocurrency markets into traditional equities.
CFTC Chairman Michael Selig stated in a Tuesday release that the contracts were approved under CFTC Regulation 40.3 and could be offered on exchanges registered with both the CFTC and Securities and Exchange Commission (SEC).
Selig noted that this development would enable American traders to access perpetual futures under US regulatory safeguards, rather than resorting to "offshore, and often unregulated, venues."
Perpetual futures allow traders to take positions on an asset’s price without owning the underlying asset or facing an expiration date. Crypto exchange BitMEX helped popularize the instruments, known as perps, in 2016.
The announcement follows a series of regulatory filings in September, where exchanges like Coinbase, Kalshi, Kraken (via its Bitnomial exchange), and OG.com sought approval to offer perpetual futures tied to individual US stocks.
These filings came after the CFTC’s May approval of Bitcoin perpetual futures contracts for Kalshi and separate regulatory relief allowing Coinbase to provide access to certain cryptocurrency perpetual futures listed on an affiliated foreign exchange.
Selig did not specify which exchanges would offer the contracts or provide a timeline for trading commencement.
The CFTC’s approach to perpetual futures has faced legal challenges. In June, CME Group’s Chicago Mercantile Exchange sued the regulator over its approval of cryptocurrency perpetual futures, arguing that they should be classified as swaps, which have different regulatory requirements. The CFTC moved to dismiss the lawsuit in September, contending that CME lacked standing.
Additionally, the announcement comes amidst a legal challenge to the US push for perpetual futures, as reported in a recent magazine article.