NextFin News - The US derivatives regulator gave the green light on Tuesday for perpetual futures on individual stocks to begin trading on registered commodity markets, a decision that transplants the most popular instrument in offshore crypto trading onto the foundation of American equity regulation — and hands prediction-market platforms a direct path onto Wall Street's turf.
Michael Selig, chairman of the Commodity Futures Trading Commission, said in a statement that bringing perpetual futures — "perps," contracts with no expiration date that dominate digital-asset trading overseas — onto regulated markets would bring a product that has grown almost entirely offshore inside the US supervisory perimeter.
"Ensures that American investors and traders can access these products within the protections of the CFTC's proven regulatory framework," Selig said in the statement, "rather than encouraging the emergence of offshore markets."
The catch is structural: because a futures contract on a single stock is legally a "security futures product," any CFTC-registered market that wants to list one must also register with the Securities and Exchange Commission to trade security futures. The green light, in other words, is a gate with two locks — and the second one belongs to the SEC.
The Regulatory Shortcut: How a Crypto Product Got a US Equity Passport
The decision is not a new statute. It is a regulatory shortcut through a door that has stood open since 2000.
Under the Commodity Futures Modernization Act, a "security future" includes both futures on a single security — single stock futures — and futures on narrow-based security indexes. Those products sit under the joint jurisdiction of the CFTC and the SEC. Broad-based index futures, by contrast, such as contracts on the S&P 500, trade under the CFTC's sole jurisdiction. That distinction is the entire architecture of what happened this week: a crypto-native product was fitted into an existing equity-derivatives chassis rather than waiting for Congress to build a new one.
The path to Tuesday's announcement was laid in months, not years. In March, the CFTC chair said a framework for perpetual contracts was weeks away, arguing the US needed to recapture liquidity that had migrated to platforms in Asia, Europe and the Bahamas. On May 29, the commission approved Kalshi's bitcoin perpetual — the first true perpetual futures contract cleared on a US-regulated exchange. In June, it granted temporary relief allowing certain registered exchanges to convert existing crypto futures into contracts without expiration dates. Then the equity filings began: on September 18, Kalshi submitted proposed rules to both the SEC and the CFTC for perpetual futures covering 58 US stocks and ETFs; the next day, Coinbase asked the CFTC to approve single-stock perpetuals starting with Apple, sending its shares up 12%.
That sequence matters. Perpetual futures are not a niche instrument. Industry estimates put monthly trading volume in offshore perpetual futures at roughly $4.7 trillion — a pool of risk and leverage that has lived almost entirely outside US jurisdiction. Tuesday's announcement is the first clear signal that the wall between that offshore market and US equity regulation is coming down through administrative action rather than legislation.
Why Single-Stock Futures Failed Before — and Why Perps Are Different
The history is not encouraging, and it is the strongest reason to treat Tuesday with caution. The United States has tried single-stock futures before. OneChicago, a joint venture of the Chicago Board of Trade, the Chicago Board Options Exchange and the London Stock Exchange, launched them in 2002. The contracts traded for nearly two decades and were shut down in 2020, after regulators lifted a long-standing ban on single-stock futures options and volume had already migrated to listed equity options. At their peak, single-stock futures never came close to challenging the options market they were designed to complement.
That history is the cyclical leg of this story: the product form — a derivative on a single name — has been tried, and it lost. But the perp is not merely a single-stock future without an expiry. Its distinguishing mechanism is the funding rate: a periodic payment, typically every eight hours, exchanged between long and short positions that keeps the perpetual contract anchored to the spot price without a settlement date. That funding-rate loop is what allows a position to be held indefinitely, and it is what made perps the default leveraged vehicle in crypto. In effect, the CFTC is being asked to approve not a contract but a pricing mechanism — one that has no direct analog in the American equity-derivatives complex.
The scale gap underscores how early this still is. Kalshi's CFTC-regulated crypto perpetuals reached a record $17.98 million in open interest — a rounding error against the trillions that trade offshore every month. The US-regulated perp market, in other words, is a pilot project standing next to an ocean.
Who Benefits, Who Is Exposed
The immediate beneficiaries are the platforms that have been building the infrastructure for exactly this moment. Kalshi, the prediction-market operator that secured the first US perpetual approval, now has a blueprint for equity exposure. Coinbase, which filed for single-stock perps in September, gains a regulated distribution channel for a product its users already trade offshore. OG.com Markets — recently spun out of Crypto.com as an independent derivatives and prediction platform valued at $5 billion, with Robinhood taking an equity stake in a multi-year deal to use its CFTC-regulated exchange and clearinghouse — represents the newest wave of entrants.
The exposed parties are the incumbents. Single-stock derivatives have long been the preserve of established venues: CME Group, Cboe Global Markets (owned by Intercontinental Exchange), and Nasdaq. These exchanges already clear equity options and, in CME's case, broad-index futures. A regulated perpetual on Apple or Nvidia competes directly with single-stock options for the same trader demand — leveraged, directional, able to be held indefinitely without rolling contracts.
The market read the announcement as a transfer of optionality toward the crypto-native camp. As of midday in New York on Tuesday, Coinbase shares rose 8.8% to $149.98, while Strategy (MSTR) added 4.8% and Bakkt gained 4.1%. The incumbent exchange names were little changed to slightly lower: CME Group fell 0.3%, Nasdaq slipped 0.4%, and Intercontinental Exchange declined 0.6%. Robinhood, which has both an ownership stake in OG.com and its own derivatives ambitions, edged up 1.4%. The spread — crypto platforms bid, exchange operators flat — is the market's first read on who wins the intermediation layer.
But the move is early and thin. A single session's gap does not price a regime shift; it prices the announcement. The real test is open interest six months from now.
The Second-Order Question: Who Intermediates US Equity Risk
The first-order effect of Tuesday's decision is obvious: US traders will soon be able to hold leveraged, no-expiration positions on single stocks inside a CFTC-regulated venue instead of an offshore exchange. The second-order effect is what should concern Wall Street.
Perpetual futures are more than a product; they are a distribution model. They trade nearly around the clock, seven days a week. They require no contract rolling. They use funding-rate mechanics that keep the perp anchored to the spot price without a settlement date. For a generation of traders raised on crypto venues, that is the default way to express a directional equity view — not monthly options, not quarterly futures.
If even a fraction of the estimated $4.7 trillion monthly offshore perp volume migrates onto US-regulated platforms, the plumbing of American equity derivatives begins to relocate. Margin, clearing, custody, market data, and order flow — the revenue layers that exchanges and clearinghouses have monetized for decades — would accrue to a different set of intermediaries. That is why this is not merely a product-approval story. It is a contest over who sits between the American retail trader and the American stock.
Selig's stated rationale makes the policy logic explicit: keep the activity onshore where the CFTC can supervise it, rather than letting it grow in jurisdictions with lighter oversight. The regulator is effectively arguing that prohibition failed — the product existed, offshore, at enormous scale — and that regulated permission is the safer equilibrium. That is a pragmatic posture, but it also concedes the point that drove the entire crypto-derivatives buildout: demand for continuous, leveraged exposure will not be legislated away.
The third-order implication reaches into cash equities. If perpetual futures become the preferred vehicle for leveraged single-stock views, some demand currently expressed through single-name options — and the order flow, premium, and hedging activity that options generate — could migrate. Brokerages that route that flow, and the exchanges that list those options, would feel it in revenue before they feel it in headline volume.
The Counter-Thesis: Security Futures Is a Narrow Door
The strongest argument against reading Tuesday as a regime shift is that the security-futures framework is a narrow and cumbersome door.
Security futures carry a heavier regulatory burden than commodity futures. Beyond the CFTC product approval, a venue must register with the SEC to trade security futures, satisfy suitability and disclosure obligations, and operate under margin rules that have historically been stricter than the portfolio-margin regimes crypto-native platforms would prefer. Joint jurisdiction means two agencies must agree on the shape of every new listing, and the SEC has been protective of equity products that touch retail investors.
There is also the competition from the product that already exists. US investors can already express leveraged single-stock views through listed options, which offer deep liquidity, standardized contracts, and the backing of established clearinghouses. A new perpetual must prove it is meaningfully better — cheaper, more capital-efficient, or easier to use — to pull volume away from a market that already works.
The regulatory skepticism is not hypothetical. The CFTC's former leadership has argued forcefully in public filings against expanding derivatives definitions to absorb new product categories, warning that reclassification can quietly rewrite the boundaries of what counts as a swap or a future. The SEC's record on equity-linked derivatives suggests it will scrutinize any filing that looks like retail leverage by another name. If the commission treats the first wave of security-futures notice filings cautiously — requesting changes, delaying action, or limiting eligible underlyings to large-cap names — the rollout could stretch across quarters rather than weeks.
And then there is the offshore alternative. The leverage-hungry retail trader who wants extreme multiples on a single stock may not find them in a US-regulated perp. If the CFTC-regulated product is too constrained, the offshore venues Selig wants to displace simply keep their volume.
The answer to that counter-thesis is that the CFTC appears to be moving deliberately on exactly this tension: case-by-case product approvals, starting with bitcoin and broad indexes, before touching single stocks. That sequencing is designed to prove the model before scaling it. But it also means the SEC notice requirement is the genuine choke point — and the single most important signal to watch.
Here is the falsifying line: if the SEC rejects, or sits on, the first security-futures notice filings for more than 90 days, or if first-quarter open interest in US-listed stock perpetuals fails to reach a meaningful threshold — say, $500 million in notional outstanding — then the structural-shift thesis is wrong, and this is a product launch, not a regime change.
What Comes Next: Three Time Horizons
Short term (weeks): Expect announcement-driven volatility in the names positioned for the trade — crypto exchanges, prediction-market operators, and leveraged-retail brokerages — while incumbent exchange stocks digest the competitive threat. The direction of the spread between the two groups will be the first read on whether the market believes the threat is real.
Medium term (6 to 12 months): The concrete events are the SEC notice filings, the first exchange to list a single-stock perp, the margin terms those venues negotiate, and the initial open-interest numbers. This is the window in which the thesis is proved or disproved with actual usage data rather than regulatory language.
Long term (structural): If the model works, equity-derivatives intermediation shifts incrementally toward crypto-native venues, and the offshore perpetual market loses its regulatory-arbitrage premium. If it stalls, single-stock options retain their dominance and the security-futures framework remains a niche.
Three scenarios frame the path. The base case: a handful of platforms list stock perpetuals within six months, initial volumes are modest, and regulatory friction slows but does not stop adoption. The upside case: rapid retail migration, perpetuals become the preferred leveraged equity vehicle, and exchange operators re-rate lower as options flow migrates. The downside case: the SEC blocks or delays the first filings, adoption never reaches critical mass, and the status quo holds.
The things to watch, in order: the SEC's action on the first security-futures notice filings; which venue lists first; the margin and leverage terms offered; and quarterly open-interest data for the new contracts. Each of those is observable, dated, and falsifiable.
Tuesday's decision did not create a new market. It recognized one that already existed offshore and offered it a regulated address. Whether American traders move in depends less on the CFTC's blessing than on the SEC's door — and on whether a perpetual, once listed, proves it is simply a better way to bet on a stock.
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