CFTC Clears Perpetual Futures on Individual Stocks for U.S. Trading

Perpetual futures, the never-expiring contract that grew up on offshore crypto exchanges, can now trade on individual U.S. stocks, CFTC Chairman Michael Selig said in a statement Tuesday.

"Today, perpetual futures contracts on individual equity securities (the 'Equity Perps') can begin trading for the first time on CFTC-registered exchanges," Selig wrote.

Who can list them

Per the CFTC release, the contracts can trade only on designated contract markets that are also registered with the SEC to handle security futures. Selig said the contracts were deemed approved under CFTC Regulation 40.3 as security futures products. That puts them under both the CFTC's and the SEC's rules.

The statement did not name a specific exchange or give a launch date.

How a perpetual works

A normal futures contract has an end date. A perpetual does not. To keep its price close to the real asset, traders on one side pay the other a small "funding" fee every few hours. When the perp trades above the stock, buyers pay sellers, and the reverse when it trades below. That lets traders hold a bet on a stock, with leverage, for as long as they keep paying.

Why now

The move extends a path the agency started this year. Selig's statement points to the CFTC's May 29 approval of a bitcoin perpetual contract from KalshiEX, and to a March memorandum of understanding between the CFTC and the SEC. He said the goal is to give traders these products under U.S. protections "rather than being forced to turn to offshore, and often unregulated, venues."

Selig also cited SEC Chairman Paul Atkins, who has described such products as stuck in a regulatory "no man's land."

In our opinion: Crypto just exported its most popular trading tool to Wall Street, and that is a big deal for exchanges that hold both licenses. Perps bring easy leverage, so the margin rules each exchange sets will show how well investors are protected. Watch for the first exchange to list one and which stocks it picks.