The CFTC Approved Stock Perps by Silence. A Judge Says It Probably Lacked Authority.

Stock perpetual futures are live on US-regulated exchanges, but the first federal judge to examine their approval says the CFTC probably lacked authority to allow them. Trading has not been halted: Judge Valerie Caproni denied emergency relief while questioning the legal foundation of the products.

That distinction matters before the next deadline. The CFTC must oppose a separate preliminary-injunction motion by November 6; the court has not granted that injunction or issued a final judgment.

Approval by silence

On September 18, KalshiEX, Coinbase Derivatives and Bitnomial Exchange filed to list cash-settled perpetual futures on individual US stocks. Under Regulation 40.3, those filings became approved when the 45-day review period ended November 2 without Commission action, according to the CMA complaint.

There is therefore no written CFTC approval order analyzing these products: approval resulted from the clock expiring. That procedural result is the agency action being challenged; it does not itself settle whether the statute authorizes the contracts.

In his November 3 statement, Chairman Michael S. Selig classified them as security futures under the Commodity Futures Modernization Act of 2000, subject to both CFTC and SEC frameworks. He also invoked the agencies’ March 11 memorandum of understanding.

The CFTC announcement presented the change as giving Americans a domestic alternative to offshore venues. The dispute concerns whether that policy objective fits the statutory category used to authorize trading.

The judge’s actual reasoning

The Capital Markets Alliance Association sued on November 2 in the Southern District of New York. The New York nonprofit’s members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association.

In her November 3 order, Caproni found the CMA “is likely to succeed on the merits of its claim that the CFTC lacks statutory authority” to allow these retail products. Her reasoning turns on what a security future must promise.

Under 7 U.S.C. § 1a(44), that category requires a “sale for future delivery of a single security.” Because perpetual contracts never provide for that delivery, she wrote, “they cannot be a security future,” citing Leist v. Simplot.

Instead, the contracts “appear to satisfy the definition of a swap,” placing these single-stock instruments within SEC regulation. This is a preliminary interpretation of the products’ legal character, not merely an objection to how the CFTC processed the filings.

Caproni also found that the balance of equities and public interest favored CMA. Nevertheless, she denied the temporary restraining order because its evidence of likely irreparable harm was “conjectural”; the finding on statutory authority did not satisfy that separate requirement.

What the calendar says

The order sets Friday, November 6 for the CFTC’s opposition and Tuesday, November 10 for CMA’s reply. Both deadlines remain ahead, and the schedule is expressly subject to change by the assigned district judge, whom the case docket identifies as Lorna G. Schofield.

An injunction granted after that briefing could suspend Kalshi’s stock perps within weeks of launch. On CMA’s requested terms, it would also block the CFTC from giving effect to the Coinbase Derivatives and Bitnomial approvals; their filings cover other equity contracts, including Apple and Alphabet exposure.

No such injunction has been granted. The TRO denial leaves trading available while the separate request remains unresolved.

What a US trader is actually holding

Kalshi’s November 4 certification specifies cash settlement, no expiration or delivery date, and periodic funding to tether the contract to its reference price. Its minimum trading unit is one five-thousandth of a 100-share unit: 0.02 shares of price exposure per contract, with continuous listing intended from November 5.

According to Kalshi’s product documentation, funding passes between longs and shorts daily at 4 p.m. ET. There are no voting rights, and dividends become cash adjustments; funding should be budgeted as a holding cost, not treated as yield, even when a position receives payments.

Kalshi says most retail customers access these contracts through Kalshi Prime, with customer funds held separately and Kalshi Klear handling clearing. Identity verification, approval for a separate margin account and an educational tutorial are required; the perps balance is separate from the prediction-market balance.

The reported November 3 launch covered Qualcomm, McDonald’s, Amgen and Costco at maximum leverage of 4.9x, with combined 24-hour volume of about $7.85 million as of 5:30 a.m. ET on November 4, led by Qualcomm at about $3.85 million. The roster has since expanded to dozens of names, including Nvidia, Tesla and SpaceX. Kalshi says users traded more than $300 million since a stealth launch.

Listing standards published September 23 require a market value of at least $100 billion and minimum margin of 15.5%, permitting roughly 6.5x; the launch was set below that ceiling.

Scheduled closures prevent opening or closing positions. Leverage and those closures are the two mechanics that determine whether collateral can survive a gap move: leverage magnifies the loss relative to margin, while closure removes the opportunity to exit during the interruption.

Why this is a crypto story

A crypto-native instrument is moving into equities. Kalshi’s path ran from bitcoin perps in May 2026, including the May 29 BTCPERP approval order referenced by Selig, through gold and silver in September to stocks.

Coinbase Derivatives belongs to the same venue family US crypto traders already use for regulated perpetual exposure, and its equity filing faces this challenge too. But Caproni’s reasoning concerns the definition of a security future; it is not a verdict on crypto perpetuals with commodity underlyings.

What to check before you touch these contracts

• Confirm which regulator’s rulebook governs the specific instrument.
• Check the funding rate and its daily 4 p.m. ET schedule.
• Verify the separate margin account’s collateral; prediction-market balances are separate.
• Read closure schedules and assess gap risk at 4.9x leverage.
• Check exchange rules for suspension if a court order interrupts trading.
• Confirm tax treatment for the instrument’s classification rather than assuming stock or crypto rules apply.

The November 6 opposition and November 10 reply are the next hard data points. The approvals stand until a court says otherwise; treat the classification dispute as a risk factor, not a trading signal.

Cover photo: New York Stock Exchange facade, via Pexels by Arpan Parikh.