CFTC Opens U.S. Markets to Crypto-Style Perpetual Futures…

The Commodity Futures Trading Commission has cleared perpetual futures tied to individual stocks for trading on regulated U.S. exchanges for the first time, extending a derivatives model popularized by cryptocurrency markets into traditional equities. CFTC Chairman Michael Selig announced on November 3 that the contracts, known as equity perps, were deemed approved under Regulation 40.3. They will operate within the existing security futures framework, placing them under joint oversight by the CFTC and Securities and Exchange Commission. The decision removes a major regulatory obstacle for exchanges seeking to offer leveraged exposure to U.S. stocks without fixed contract expiration dates. However, the CFTC did not identify which exchanges received approval, which stocks would be available or when trading would begin.

How Did Equity Perpetuals Gain Regulatory Approval?

The CFTC classified the contracts as security futures products under the Commodity Futures Modernization Act of 2000, legislation establishing joint SEC and CFTC jurisdiction over derivatives tied to individual securities and narrow-based stock indexes. Unlike conventional futures, perpetual contracts have no scheduled expiration. Traders can maintain long or short positions without regularly rolling contracts into later maturities. Periodic funding payments generally help align perpetual prices with their underlying assets. Under the U.S. framework, eligible contracts must trade on designated contract markets that are also notice-registered with the SEC as national securities exchanges for security futures products. The agencies signed a memorandum of understanding in March to improve coordination on products crossing their regulatory jurisdictions. Selig said the arrangement provides a path for instruments previously constrained by uncertainty over the division of regulatory authority. The announcement follows the CFTC's May approval of regulated Bitcoin perpetual futures, which established a domestic route for contracts historically concentrated on offshore cryptocurrency exchanges.

Investor Takeaway

The approval establishes a regulated U.S. route for equity perps without requiring a new derivatives statute, although actual market access depends on exchange launches.

Which Exchanges Are Preparing to Offer Stock Perps?

Several U.S. derivatives platforms had submitted proposals before the CFTC's announcement, positioning themselves to compete for an emerging market in stock-linked perpetual contracts. Kalshi filed proposals in September covering perpetual futures tied to individual stocks and exchange-traded funds, including Apple, Nvidia, Microsoft and Amazon. Coinbase Derivatives also sought approval for single-stock perpetual futures, proposing trading access across an initial selection of major U.S. equities. The initiative would extend Coinbase's existing international stock derivatives business into the domestic market. Meanwhile, North American Derivatives Exchange, operating as OG.com Markets, proposed cash-settled equity perps designed to trade around the clock on weekdays. Its framework includes scheduled funding adjustments intended to keep contract prices aligned with underlying shares. These filings identify potential competitors but do not establish that every proposed contract has been approved or launched. The CFTC's latest statement did not specify which applications or individual products were covered by its announcement.

How Could Equity Perps Change Stock Trading?

The main commercial opportunity is to provide exposure to individual U.S. equities beyond conventional stock-market hours, without requiring ownership of the underlying shares. For institutional traders, the contracts could provide additional hedging and price-discovery tools when cash equity markets are closed. Retail traders could gain access to leveraged directional positions without the fixed maturity dates of traditional futures. However, extended trading creates pricing challenges. When the underlying equity market is closed, derivatives prices may respond to overseas developments, corporate announcements or changing risk expectations without a continuously available cash-market reference. Funding mechanisms can reduce persistent divergence between perpetual contracts and underlying equities, but they cannot guarantee price convergence or eliminate volatility during thin trading periods. Security futures must also comply with existing requirements covering coordinated trading halts, market surveillance and customer margin. The general minimum initial and maintenance margin for unhedged security futures positions is 20%, with specific permitted offsets subject to different treatment.

Investor Takeaway

Extended-hours access could improve hedging flexibility, but liquidity gaps, funding costs and leveraged losses remain material risks.

Can U.S. Exchanges Compete With Offshore Perpetual Markets?

The regulatory opening comes as perpetual futures have become central to cryptocurrency derivatives trading. Offshore venues and decentralized platforms such as Hyperliquid have attracted trading activity by offering continuous markets and leveraged exposure across digital assets and increasingly traditional financial instruments. U.S. regulators are attempting to accommodate comparable products within established exchange, clearing and surveillance structures rather than leaving the market predominantly offshore. For domestic exchanges, regulatory access alone will not determine competitiveness. Liquidity depth, transaction costs, funding arrangements and available trading hours will influence whether traders migrate from existing venues. The next developments to watch are the identities of approved exchanges, the initial stock contracts, their margin and funding terms, and confirmed launch dates. Those details will determine how quickly the CFTC's decision translates into an active U.S. equity perpetuals market.