Kalshi, a rapidly emerging player in the world of regulated prediction markets, has announced an ambitious plan to launch 24‑hour trading for perpetual contracts tied to two of the most watched technology stocks: Tesla Inc. and Nvidia Corp. The company’s proposal, which seeks approval from U.S.
regulators, would introduce a suite of about 60 perpetual contracts covering a broad range of individual equities and exchange‑traded funds (ETFs). By doing so, Kalshi hopes to bring a product that has become a staple in the cryptocurrency sphere—continuous, leveraged, no‑expiry futures—into the traditional equity market.
The move comes at a time when Wall Street is deeply divided over which regulatory body should oversee these novel financial instruments. On one side, the Securities and Exchange Commission (SEC) argues that perpetual contracts, because they are essentially derivative securities linked to underlying equities, fall squarely within its jurisdiction.
The SEC’s mandate includes protecting investors, ensuring fair markets, and maintaining transparency in the trading of securities and their derivatives. On the other side, the Commodity Futures Trading Commission (CFTC) maintains that because perpetual contracts operate similarly to futures contracts—allowing traders to speculate on price movements without owning the underlying asset—they should be regulated as commodities. Kalshi’s proposal attempts to navigate this regulatory gray area by positioning its products as “prediction contracts.” Under this framework, each contract represents a market’s collective forecast about whether a specific asset’s price will be above or below a predetermined level at a future point in time.
The company argues that this structure aligns more closely with its existing, SEC‑approved prediction‑market offerings, which have historically dealt with events ranging from political outcomes to economic indicators. By framing Tesla and Nvidia perpetuals as prediction contracts rather than traditional futures, Kalshi hopes to satisfy the SEC’s criteria for securities while also addressing the CFTC’s concerns about derivative‑type risk. The appeal of 24/7 perpetual contracts is clear to many traders.
Traditional equity markets operate on set schedules—typically 9:30 a.m. to 4:00 p.m.
Eastern Time on weekdays—leaving large gaps where price movements in global markets cannot be acted upon. In contrast, crypto‑based perpetuals trade around the clock, allowing participants to react instantly to news, earnings releases, or macro‑economic events that occur outside normal market hours. For high‑profile stocks like Tesla, whose price can swing dramatically after after‑hours earnings calls or major product announcements, continuous trading could provide a more accurate reflection of market sentiment and a new avenue for hedging or speculative strategies.
Nvidia, a leader in graphics processing units (GPUs) and artificial intelligence (AI) hardware, presents a similarly compelling case. The company’s earnings reports and product launches often generate significant volatility, and the broader AI boom has heightened investor interest in its stock.
Offering perpetual contracts for Nvidia would give market participants the ability to capture price movements at any hour, potentially increasing liquidity and deepening price discovery for the underlying equity. However, the introduction of such products is not without risk.
Perpetual contracts typically involve leverage, meaning traders can amplify both gains and losses. In the crypto world, this has led to high‑profile liquidations and market turbulence during periods of rapid price swings. Regulators are understandably cautious about extending these dynamics to the equity space, where retail investors may be less familiar with the mechanics of leveraged, no‑expiry products. To mitigate these concerns, Kalshi proposes a suite of safeguards, including strict position limits, real‑time margin monitoring, and robust risk‑management protocols designed to prevent cascading liquidations.
Kalshi also plans to incorporate a funding rate mechanism—common in crypto perpetuals—to align contract prices with the spot market. This rate, paid periodically between long and short positions, helps keep the perpetual price tethered to the underlying stock’s price, reducing the risk of sustained divergence. By transparently publishing the funding rate and providing tools for traders to monitor it, Kalshi aims to foster a more stable trading environment.
The broader industry is watching Kalshi’s initiative closely. If the SEC grants approval, it could set a precedent for other regulated platforms to offer similar products, potentially reshaping the landscape of equity derivatives.
Conversely, a rejection or a demand for significant modifications could reinforce the CFTC’s authority over leveraged contracts, limiting the expansion of crypto‑style instruments into traditional markets. Investors and market participants should consider several implications.
First, the availability of 24/7 perpetuals could blur the lines between traditional equity investing and crypto‑style speculation, prompting a reevaluation of portfolio risk management strategies. Second, the regulatory outcome will likely influence the speed at which other firms develop comparable offerings, affecting competitive dynamics within the fintech space. Finally, the introduction of these contracts may attract a new class of traders—those accustomed to crypto markets—who bring different expectations regarding liquidity, volatility, and trading hours. In summary, Kalshi’s bid to launch continuous, leveraged contracts on Tesla and Nvidia represents a bold attempt to bridge the worlds of crypto derivatives and regulated equity markets.
The company’s success hinges on navigating a complex regulatory environment, addressing concerns about leverage and investor protection, and demonstrating that its prediction‑contract model can safely accommodate the unique characteristics of high‑profile stocks. Should the SEC endorse the proposal, it could usher in a new era of around‑the‑clock equity trading, offering both opportunities and challenges for traders, investors, and regulators alike.