CFTC Lets Traders Bet on Stocks With Crypto-Style Perpetual Futures

In brief The CFTC cleared perpetual futures on individual stocks to trade on registered U.S. exchanges for the first time, bringing the expiration-free, leveraged instrument long popular in crypto to traditional equities. Chairman Michael Selig framed it as part of his push to “onshore” perpetual products, building on the agency’s earlier approval of Bitcoin perps for Kalshi. The contracts fall under joint CFTC-SEC oversight via a March memorandum of understanding. The U.S. derivatives regulator has opened the door to perpetual futures on individual stocks, importing one of crypto’s most popular trading instruments into traditional equity markets for the first time.The Commodity Futures Trading Commission said Tuesday that “equity perpetual futures,” or perpetual contracts tied to individual stocks, can now begin trading on CFTC-registered exchanges.Perpetual futures, long a staple of crypto markets, are derivatives that track an asset’s price but carry no expiration date, letting traders hold leveraged positions indefinitely as long as they meet margin and funding requirements. Until now, they’ve been largely off-limits to U.S. traders.Chairman Michael Selig framed the move as the latest step in a campaign to bring perpetual products onshore.“In my inaugural remarks, I directed the CFTC to use the tools at its disposal to onshore perpetual derivative products so that they can flourish in the U.S., subject to appropriate safeguards,” he said, calling the stock contracts an extension of the agency’s earlier approval of the first true Bitcoin perpetual futures on a regulated U.S. exchange.That milestone, as Decrypt reported, saw the CFTC clear Bitcoin perpetual futures for Kalshi earlier this year.Selig returned to a familiar argument: that regulated U.S. venues are safer than the offshore platforms traders have otherwise had to use.Bringing these products into regulated markets “ensures that American investors and traders can access these products within the protections of the CFTC’s proven regulatory framework, rather than being forced to turn to offshore, and often unregulated, venues,” he said.It’s a theme he pressed just last week when he used the record Binance hack to argue offshore exchanges need U.S. oversight.The equity perps were deemed approved as security futures products under the Commodity Futures Modernization Act of 2000, placing them under the joint oversight of the CFTC and the Securities and Exchange Commission.Selig credited a historic memorandum of understanding the two agencies signed in March for ending the jurisdictional limbo that had, in SEC Chairman Paul Atkins’s words, stranded such products in a regulatory “no man’s land.”The approval arrives amid a rush to bring perps onshore. The CFTC has floated plans to bring crypto exchanges under federal oversight, dismissed a CME lawsuit challenging crypto perpetual futures, and cleared the way for Coinbase, which recently filed to list single-stock perps on names like Apple, Tesla and Nvidia.For Selig, the goal is explicit: ensuring “the new frontier of finance is built in the United States of America.”Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more. Join 72,000+ readersCreate an account to save your articles.