A new class of leveraged derivatives on individual companies has entered the U.S. market, allowing traders to maintain positions in stocks like Nvidia and Tesla without the need to roll over contracts. The trading platform Kalshi began offering these equity perpetuals on Nov 5, reporting more than $300 million in trading volume on the debut of the products. The contracts, which can provide up to 5x leverage, were authorized by the Commodity Futures Trading Commission as security futures under a joint oversight framework with the SEC.
The launch comes as the CFTC faces a lawsuit from the Capital Markets Alliance, a group including Cboe and Citadel Securities, which argues the products are security-based swaps that should be under the SEC’s exclusive jurisdiction. While a federal judge recently denied a request to block the trading of the perps, the court noted that the challenge to the CFTC’s authority is likely to succeed on the merits. Other venues are preparing to enter the market, with Coinbase filing for approvals this fall with proposed minimum margin requirements of 15.05%.