Kalshi, a fast‑growing prediction‑market operator that has already carved out a niche in regulated event‑based trading, is now setting its sights on a bold new frontier: 24‑hour perpetual contracts tied to individual equities, starting with high‑profile names such as Tesla Inc. and Nvidia Corp.
The company’s ambition is to secure approval from U.S. regulators for a suite of about sixty perpetual contracts that cover both single‑stock and exchange‑traded‑fund (ETF) underlyings. If successful, this move would effectively transplant one of the most beloved products from the cryptocurrency world—continuous, leveraged, no‑expiry contracts—into the traditional equities market.
The proposal arrives at a time when Wall Street is embroiled in an intense debate over which regulatory body should oversee these novel instruments. The Securities and Exchange Commission (SEC) traditionally polices securities, while the Commodity Futures Trading Commission (CFTC) has jurisdiction over derivatives, including futures and swaps.
Perpetual contracts blur the line between the two, as they are derivative products that reference underlying equities but function more like a hybrid of futures and spot trading. This regulatory ambiguity has sparked a jurisdictional clash, with both agencies asserting authority over the emerging market. Kalshi’s strategy is to navigate this complex landscape by positioning its perpetual contracts as a regulated, transparent alternative to the largely unregulated crypto‑based perpetuals that have proliferated on platforms such as Binance, Bybit, and BitMEX. Those crypto products allow traders to hold leveraged positions indefinitely, with funding rates used to tether the contract price to the underlying asset’s spot price.
While popular among retail and institutional traders seeking constant market exposure, these contracts have drawn scrutiny for their lack of oversight, potential for market manipulation, and the systemic risk they could pose if widely adopted. By seeking approval from the SEC and the CFTC, Kalshi hopes to offer a product that retains the flexibility and appeal of crypto perpetuals—continuous trading, high leverage, and no expiration—while embedding it within the robust compliance frameworks that govern U.S. securities and derivatives markets.
The company has already secured a license to operate a regulated prediction market, and it plans to leverage that experience to demonstrate to regulators that its perpetual contracts will feature rigorous risk‑management controls, transparent pricing, and clear reporting standards. The initial focus on Tesla and Nvidia is no accident.
Both companies are among the most actively traded stocks in the world, boasting high liquidity, significant price volatility, and a massive following among retail investors. Tesla, the electric‑vehicle pioneer led by Elon Musk, frequently makes headlines for its rapid price swings driven by product announcements, production milestones, and Musk’s social‑media activity. Nvidia, a leader in graphics processing units and artificial‑intelligence hardware, similarly experiences sharp moves tied to semiconductor demand cycles, earnings reports, and broader tech sector trends. By offering perpetual contracts on these two stocks, Kalshi aims to attract a large user base eager for round‑the‑clock exposure to the most dynamic equities.
Beyond the headline names, the broader suite of about sixty contracts will likely include other high‑volume stocks and popular ETFs such as the SPDR S&P 500 (SPY), the Invesco QQQ Trust (QQQ), and sector‑focused funds. This diversified offering would give traders the ability to hedge, speculate, or manage exposure across a wide swath of the market without having to close positions at a fixed expiry date.
In practice, a trader could maintain a leveraged long position on Tesla through a perpetual contract, adjusting the size as market conditions evolve, while the contract’s funding rate ensures the price stays anchored to Tesla’s spot price over time. Regulators, however, are not yet convinced that perpetual contracts can be safely integrated into the existing financial system. The SEC’s Chair, Gary Gensler, has repeatedly warned that the rapid growth of crypto‑derived products poses significant investor protection challenges.
Meanwhile, the CFTC’s Chairman, Rostin Behnam, has emphasized the need for clear rules to prevent market abuse and ensure that clearinghouses can manage the heightened risk associated with leveraged, indefinite‑duration contracts. Both agencies have signaled a willingness to collaborate, but they also expect market participants to provide detailed proposals outlining margin requirements, position limits, and mechanisms for handling extreme market stress. Kalshi’s filing reportedly includes a comprehensive risk‑management framework that leverages real‑time margin calculations, automated liquidation protocols, and a dedicated clearinghouse to guarantee contract settlement. The company also plans to impose caps on leverage for retail users while offering higher limits to qualified institutional investors, mirroring the tiered approach seen in other regulated derivatives markets.
Additionally, Kalshi intends to publish transparent funding rate formulas and make them publicly accessible, allowing participants to understand the cost of holding positions over time. If the regulatory green light is granted, the launch of 24/7 stock perpetuals could have far‑reaching implications for market dynamics. Traditional equity markets operate within set trading hours, with after‑hours sessions offering limited liquidity and higher spreads. A perpetual product that trades continuously would effectively extend market access, potentially smoothing price discovery across time zones and reducing the impact of overnight news shocks.
However, it could also amplify volatility, as traders react instantly to global events without the natural pause that market closures provide. Industry observers are watching Kalshi’s move closely, viewing it as a litmus test for the broader integration of crypto‑style products into mainstream finance. Success could pave the way for other firms to develop similar offerings, fostering a new class of hybrid instruments that blend the speed and flexibility of digital assets with the regulatory certainty of traditional securities.
Conversely, a regulatory rebuff might reinforce the current divide, keeping perpetual contracts confined to the crypto sphere and limiting their exposure to the broader investor community. In summary, Kalshi’s ambition to bring 24‑hour Tesla and Nvidia perpetual contracts to the U.S.
market represents a bold attempt to bridge the gap between crypto‑derived trading tools and regulated equity markets. By targeting high‑visibility stocks, proposing a robust risk‑management architecture, and engaging both the SEC and CFTC, the company is positioning itself at the forefront of an emerging regulatory frontier. The outcome will likely shape the future trajectory of leveraged, continuous‑trading products and could redefine how investors access and manage equity exposure in an increasingly digital financial landscape.