Perpetual futures tied to individual stocks have been cleared to trade on regulated US exchanges for the first time, extending a product popular in cryptocurrency markets to traditional equities. The Commodity Futures Trading Commission said the contracts were deemed approved under Regulation 40.3.
CFTC Chairman Michael Selig said the products could be offered on exchanges registered with both the CFTC and the Securities and Exchange Commission to trade security futures. He said regulated US access could give traders an alternative to offshore venues, some of which operate without US regulation.
Perpetual futures let traders take positions on an asset’s price without owning it or facing a contract expiration date. The crypto exchange BitMEX helped popularize the instruments, often called “perps,” in 2016.
The decision follows September filings by Coinbase, Kalshi and Payward, the parent company of Kraken, through its Bitnomial exchange, seeking approval for contracts tied to individual US stocks. OG.com also proposed stock-linked contracts days later, saying they could trade around the clock on weekdays. The CFTC has not identified which exchanges will offer the products or when trading could begin.
The move comes amid legal disputes over the regulation of perpetual futures. CME Group sued the CFTC in June over the agency’s approval of cryptocurrency perpetual futures, arguing that the contracts should be treated as swaps rather than futures and that the regulator had exceeded its authority. The CFTC sought to dismiss the case in September, saying CME had not shown financial harm and could list similar contracts itself.
Sources: Cointelegraph.