Three crypto-focused financial groups have begun regulatory processes to offer single-stock perpetual futures in the United States, seeking to create a no-expiry alternative to the conventional stock futures recently launched by CME Group.
London's trading industry is coming home!
Coinbase Derivatives and Kalshi submitted applications dated September 18, while Kraken’s parent company, Payward, said it was filing the required rules and product terms through Bitnomial, its US-regulated exchange and clearinghouse.
Coinbase’s application covers perpetual futures tied to more than 50 stocks and exchange-traded funds. Kalshi submitted 58 proposed equity-linked contracts, while Payward plans to begin with ten US stocks, including Apple, Nvidia, Tesla, Microsoft and Amazon.
The CFTC lists the Coinbase and Kalshi contracts as pending approval. Payward said its contracts are also subject to the applicable regulatory process and is filing materials with both the CFTC and Securities and Exchange Commission.
None of the proposed products is available for trading yet.
No Expiration or Contract Rollovers
The three proposals use the perpetual structure associated with crypto derivatives but apply it to individual US shares. The contracts would be cash-settled and provide leveraged long or short price exposure without transferring ownership of the underlying stock.
Traders would therefore not receive shares, voting rights or dividends. Instead of expiring on a specified date. The proposed perpetual structures use use recurring funding payments designed to keep their prices aligned with the referenced stocks.
All three groups are also targeting 24/5 availability, although their proposed trading schedules and funding arrangements differ.
Perpetuals Compete with CME’s Quarterly Contracts
The filings follow CME Group’s July 27 launch of 55 standard and 22 Micro single-stock futures. Those products already provide leveraged, cash-settled exposure to large US companies and trade for most of the weekday.
The structural difference is expiration. CME lists contracts for consecutive quarterly months, requiring traders who want to maintain exposure beyond maturity to roll into a later contract.
The Coinbase, Kalshi and Payward proposals would allow positions to remain open without a scheduled rollover, provided margin requirements are maintained. Single-stock futures are classified as security futures products in the United States.
Unlike broad-based equity index futures, which fall under the CFTC, these instruments are subject to joint SEC and CFTC oversight. That accounts for the additional regulatory process facing the proposed contracts.
Equity perpetuals are already available to customers outside the United States through venues including Coinbase International, Kraken and Binance.
Payward has not disclosed leverage limits or final contract specifications, while Coinbase and Kalshi remain subject to the CFTC review process.
This article was written by Tanya Chepkova at www.financemagnates.com.
Source: Finance Magnates
