Kalshi, a Chicago‑based operator of regulated prediction markets, has announced an ambitious plan to launch a suite of 24‑hour perpetual contracts tied to high‑profile equities such as Tesla Inc. (TSLA) and Nvidia Corp. (NVDA). The company is currently seeking approval from the U.S.
Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to list about sixty perpetual products that cover both individual stocks and exchange‑traded funds (ETFs). This move represents a significant convergence of the cryptocurrency‑derived perpetual futures model with traditional equity markets, and it arrives at a time when regulators are still debating which agency should have jurisdiction over these hybrid instruments. ### Background on Perpetual Contracts Perpetual contracts, often called “perps,” are a type of derivative that allow traders to speculate on the price movement of an underlying asset without an expiration date. Unlike standard futures, which settle on a predetermined date, perps use a funding rate mechanism to keep the contract price anchored to the spot price of the underlying asset.
This funding rate is periodically exchanged between long and short positions, creating a continuous incentive for the market to stay aligned with the underlying’s price. In the crypto world, perps have become one of the most traded products on platforms such as Binance, Bybit, and FTX, attracting billions of dollars in daily volume. ### Why Kalshi Wants to Bring Perps to Stocks Kalshi’s core business revolves around regulated prediction markets that let participants bet on the outcome of real‑world events, ranging from economic indicators to political results.
By extending its platform to include stock‑based perps, Kalshi hopes to capture a broader segment of retail and institutional traders who are already familiar with the 24/7 nature of crypto derivatives but are looking for exposure to traditional equities. Tesla and Nvidia are natural candidates for this rollout because they are among the most actively traded and most volatile stocks, offering ample price movement for speculative strategies. The company argues that perpetual contracts can provide several benefits over conventional options and futures. First, the lack of an expiry date eliminates the need for traders to roll over positions, reducing transaction costs and operational friction.
Second, the continuous funding mechanism can create more efficient price discovery, especially during after‑hours trading when traditional markets are closed. Finally, because perps are settled in cash rather than the underlying asset, they can be more accessible to investors who do not wish to hold the actual shares. ### The Regulatory Landscape The introduction of stock‑based perps raises a complex regulatory question: should these products be overseen by the SEC, which governs securities, or the CFTC, which regulates derivatives and commodities?
Historically, the SEC has claimed authority over securities‑based futures, while the CFTC has jurisdiction over commodity futures and swaps. However, the line blurs when a product combines features of both, as is the case with perpetual contracts that are cash‑settled and lack a defined expiration.
In recent months, the SEC and CFTC have been engaged in a public debate over the appropriate regulatory framework for crypto‑derived derivatives. The SEC’s Chair, Gary Gensler, has repeatedly warned that many crypto products may be securities and thus fall under SEC purview.
Meanwhile, the CFTC’s Chair, Rostin Behnam, has emphasized the agency’s role in overseeing derivatives markets, including those that are crypto‑based. Kalshi’s filing seeks a joint review, proposing that the product be treated as a “security‑based swap,” a classification that would place it under the CFTC’s oversight while still acknowledging its underlying equity nature. ### Potential Market Impact If Kalshi receives the green light, the launch of 24/7 Tesla and Nvidia perps could reshape how investors interact with high‑profile stocks. Traditional equity markets operate on a set schedule—typically 9:30 a.m.
to 4:00 p.m. Eastern Time—leaving a gap where price discovery is limited to after‑hours trading and pre‑market activity. Perpetual contracts would fill that gap, offering continuous pricing and the ability to hedge or speculate at any hour. This could attract a wave of new participants, especially younger traders accustomed to the always‑on nature of crypto platforms.
Moreover, the presence of regulated perps could pressure existing crypto exchanges to seek similar approvals, potentially leading to a broader migration of crypto‑style products into the regulated securities space. It may also prompt other financial firms—such as traditional brokerage houses and futures exchanges—to develop their own versions of stock‑based perps, intensifying competition and innovation. ### Risks and Considerations Despite the potential upside, there are notable risks. The funding rate mechanism, while designed to keep prices in line with the spot market, can become volatile during periods of extreme market stress, leading to rapid swings in the cost of holding a position.
Additionally, the continuous nature of the contracts may amplify leverage usage, raising concerns about systemic risk if large, leveraged positions unwind suddenly. Regulators are likely to scrutinize the product’s transparency, margin requirements, and the adequacy of risk controls. They will also examine how the contracts interact with existing market structures, such as the role of market makers and the impact on price integrity of the underlying equities.
### Kalshi’s Roadmap Kalshi has outlined a phased rollout strategy. The first phase focuses on a limited set of high‑liquidity stocks—Tesla and Nvidia—along with a handful of ETFs that track major indices. The company plans to launch a beta version for qualified institutional investors while it finalizes its compliance framework. Subsequent phases would expand the offering to include a broader array of stocks and sector‑specific ETFs, potentially covering up to sixty perpetual contracts as initially proposed.
To support the launch, Kalshi is investing in robust technology infrastructure, including real‑time pricing engines, risk management systems, and a secure settlement process that ensures cash‑settlement occurs promptly and accurately. The firm is also engaging with market participants to gather feedback on contract specifications, funding rate calculations, and margin models. ### Conclusion Kalshi’s pursuit of regulated, 24‑hour perpetual contracts for Tesla, Nvidia, and other equities marks a pivotal moment in the blending of crypto‑style derivatives with traditional financial markets. By navigating the regulatory crossroads between the SEC and CFTC, the company hopes to set a precedent for how such hybrid products can be safely offered to a wide audience.
If approved, the introduction of stock‑based perps could provide continuous market access, new hedging tools, and a fresh avenue for speculative activity, while also prompting regulators to refine their oversight frameworks to keep pace with financial innovation.