CFTC clears stock perpetual futures for trading on US exchanges

Perpetual futures contracts tied to individual stocks can begin trading on regulated US exchanges for the first time, according to the Commodity Futures Trading Commission (CFTC), extending a derivatives product popularized in cryptocurrency markets into traditional equities.

CFTC Chairman Michael Selig said in a Tuesday statement that the contracts were deemed approved under CFTC Regulation 40.3 and could be offered on exchanges registered with both the CFTC and Securities and Exchange Commission (SEC) to trade security futures products.

Selig said bringing the products into regulated US markets would allow American traders to access perpetual futures under US regulatory safeguards rather than being “forced to turn 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, commonly referred to as perps, in 2016.

CFTC announces approval of equity perpetual futures trading. Source: CFTC

The announcement follows a wave of regulatory filings in September, when Coinbase, Kalshi and Kraken parent Payward, through its Bitnomial exchange, sought approval to offer perpetual futures tied to individual US stocks. OG.com joined the push days later, proposing contracts that could trade around the clock on weekdays.

The filings followed 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 identify which exchanges would offer the contracts or provide a timeline for when trading would begin.

Related: CFTC sues Utah to block action against prediction markets

US push for perpetual futures faces legal challenge

The announcement also comes nearly three months after President Donald Trump said the CFTC was working to bring Hyperliquid, a decentralized crypto exchange best known for its perpetual futures trading, into the US in a “fully compliant and legal fashion.”

Trump made the remarks during an Aug. 19 White House event. At the time, neither the CFTC nor Hyperliquid had announced a formal plan for bringing the platform to US markets.

However, the CFTC’s approach to perpetual futures has faced legal opposition. In June, CME Group’s Chicago Mercantile Exchange sued the regulator over its approval of cryptocurrency perpetual futures, arguing that the contracts should be regulated as swaps rather than futures and that the agency had exceeded its authority. The distinction matters because swaps are subject to different regulatory requirements, potentially including stricter reporting, margin and registration rules, while futures can trade under the existing futures exchange framework.

The CFTC moved to dismiss the lawsuit in September, arguing that CME lacked standing because it had not demonstrated financial harm and could list similar contracts itself.