Perpetual Futures Enter U.S. Stock Market Amid Wall Street Lawsuits

Conflicts are arising on Wall Street as perpetual futures enter the U.S. stock market. The emerging trading platform Kalshi has launched perpetual futures products that allow investment in individual stock price fluctuations, prompting existing financial firms such as Citadel Securities and the Chicago Board Options Exchange (Cboe) to file lawsuits. The U.S. Commodity Futures Trading Commission (CFTC) recently approved over 50 individual stock-linked perpetual futures trading applications submitted by Kalshi. The trading targets include McDonald's, Meta, and SpaceX. Perpetual futures are derivatives with no expiration date, allowing investors to bet on price increases or decreases without holding the actual stocks. Kalshi reported that it recorded over $300 million in trading volume within 24 hours of launch. Existing financial firms argue that this product qualifies as a security-based swap and have filed a lawsuit with the CFTC to revoke the trading approval. Although the court did not accept the request to halt trading, it indicated that there is a possibility that the claim of exceeding legal authority during the CFTC's approval process could be upheld.