CFTC opens US market to single-stock perpetual futures
The CFTC says single-stock perpetual futures can begin trading on qualifying US exchanges, bringing a crypto trading staple into regulated equity markets.
The Blockheight Editors··2 min read
The Commodity Futures Trading Commission said on Nov. 3 that perpetual futures tied to individual stocks can begin trading for the first time on qualifying US exchanges. In its statement on equity perpetual futures, CFTC Chairman Michael S. Selig said the contracts must trade on designated contract markets also registered with the Securities and Exchange Commission to trade security futures.
Which exchanges can offer the contracts?
Exchanges need both CFTC designation and SEC notice registration for security futures, according to the CFTC. Reuters reported that the contracts can let traders hold positions without an expiry date, and may involve leverage that increases both potential gains and losses.
The CFTC’s product register lists dozens of single-stock perpetual contracts as approved under the KEX code on Nov. 2, including symbols for Apple, Microsoft, Nvidia and Alphabet. The same register lists Coinbase’s single-stock perpetual filing and North American Derivatives Exchange’s perpetual security futures as “Approval Pending (45).”
How do stock perps differ from owning shares?
They are futures contracts linked to a stock’s price, rather than a purchase of the underlying shares. Traders can maintain positions without rolling over an expiring contract, Reuters explained in its report on the CFTC announcement. The CFTC described risk management and price discovery as potential uses, while saying the regulated framework could give US traders access to the products onshore.
When will trading start, and what is still unclear?
The CFTC says trading can begin, and its register records some contracts as approved on Nov. 2. Its statement did not name exchanges launching products, give start dates or specify which stocks each exchange will make available; the register shows Coinbase and North American Derivatives Exchange filings still pending.
The next step is for qualifying exchanges to bring approved contracts to market. The CFTC’s announcement does not confirm when those launches will happen or how broadly US customers will be able to access them.
Source material
- statement on equity perpetual futures — cftc.gov
- report on the CFTC announcement — investing.com