Key Highlights
- Prediction market operator Kalshi is pursuing U.S. regulatory clearance for approximately 60 perpetual futures contracts linked to major stocks and ETFs, including Tesla, Apple, and Nvidia
- Perpetual futures are leveraged instruments without expiration dates that enable continuous trading, including when traditional equity markets are offline
- While the CFTC greenlit Kalshi’s Bitcoin perpetual contract in May, individual stock perpetuals require dual approval from both the SEC and CFTC
- Market maker Citadel Securities raised concerns to regulators that these instruments could establish a “parallel shadow market” beyond traditional equity market surveillance
- Trading volume for leveraged single-stock perpetuals on Hyperliquid exploded from $4 billion to $212 billion since early 2026
Kalshi, a regulated prediction market operator, is pushing to introduce one of cryptocurrency’s most traded instruments into traditional equity markets. The firm intends to pursue regulatory authorization for approximately 60 perpetual futures contracts based on prominent stocks and exchange-traded funds.
The planned contracts, commonly called “perps” in trading circles, would encompass major corporations such as Tesla, Apple, and Nvidia. According to Kalshi, the company intends to restrict individual equity products to corporations with market capitalizations exceeding $100 billion.
Perpetual futures allow market participants to speculate on asset price movements, typically with leverage. Distinguished from conventional futures contracts, perpetuals have no settlement date. To maintain pricing alignment with the underlying asset, traders exchange periodic funding payments.
These instruments would operate continuously around the clock. This means a Tesla-linked perpetual could experience price movements during evenings and weekends while the Nasdaq remains shuttered.
Kalshi has previously secured approval for regulated cryptocurrency perpetuals. The Commodity Futures Trading Commission authorized its Bitcoin perpetual contract in May. This week, Kalshi additionally introduced round-the-clock gold and silver perpetual contracts offering leverage up to 15x.
Jurisdictional Dispute Emerges Between Regulators
Individual stock perpetuals face more complex regulatory hurdles compared to cryptocurrency-based versions. Under existing regulatory frameworks, futures contracts on specific securities fall under joint jurisdiction of the SEC and CFTC. This means Kalshi must obtain authorization from both agencies before introducing these products.
Citadel Securities submitted correspondence to both regulatory bodies on Thursday, advocating that equity-based perpetuals remain under SEC jurisdiction. The trading firm cautioned that relocating oversight could establish a “parallel shadow market” disconnected from the monitoring infrastructure employed throughout U.S. equity and options markets.
The primary worry centers on the possibility that individuals possessing material nonpublic information could execute perpetual trades on stocks during off-market hours, when traditional markets are closed and regulatory surveillance is diminished.
Consumer Protection Advocates Express Concerns
Consumer protection advocates have voiced apprehension about potential financial damage. Better Markets securities policy director Benjamin Schiffrin highlighted “the potential for huge losses, especially amongst individual investors,” given that market participants can establish leveraged positions at any time.
Kalshi maintains that its leverage offerings are comparable to conventional futures products and more conservative than numerous offshore trading venues. Chief Executive Tarek Mansour has characterized perpetuals as “the purest form of trading.”
The jurisdictional dispute has already moved into litigation. CME Group initiated legal action against the CFTC in June challenging its authorization of Kalshi’s cryptocurrency perpetuals, contending they should be classified as swaps. The CFTC dismissed the lawsuit as “frivolous” while Kalshi characterized it as competitive resistance.
Trading volume for leveraged single-stock perpetuals on cryptocurrency platform Hyperliquid skyrocketed from $4 billion to $212 billion since the beginning of 2026, based on data from Blockworks Research referenced by the Wall Street Journal.
Kalshi did not provide a response to requests for comment.
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