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ZEC $1,354 CFTC Approves Kalshi S&P 500 Perpetual Futures as Relief Window Opens
Kalshi can list S&P 500 perpetual futures, and the CFTC gave exchanges a temporary path to convert index futures into true perpetuals.
Key takeaways
- 19 crypto perps already live. Kalshi already offers 19 crypto perpetuals, including Bitcoin, Ethereum and XRP.
- The relief ends October 20. The CFTC's conditional no-action position lasts only until October 20.
- CME has sued before. CME had already sued the CFTC over its decision to let Kalshi and Coinbase list crypto perpetuals.
What happened
The US Commodity Futures Trading Commission has cleared Kalshi to launch S&P 500 stock index perpetual futures. Kalshi is a CFTC-registered designated contract market that expanded beyond event contracts into perpetual futures this year, and it will begin by offering S&P 500 perpetuals on its platform.
Kalshi filed for a US500PERP contract in August, seeking the regulator's review and approval. The product will track the MerQube US Large Cap Index and let traders take long or short exposure to the S&P 500 through a cash-settled contract with no expiration date. Like existing crypto perpetuals, it is designed to stay anchored to a reference price through periodic funding payments rather than converge to a single settlement date.
In a separate action, the CFTC's Division of Market Oversight said on October 5 that designated contract markets can convert certain existing perpetual-style broad-based security index futures into contracts with no expiration date.
Why it matters
The approval puts Kalshi in direct competition with traditional derivatives exchanges such as CME Group and Cboe Global Markets. CME had already sued the CFTC over the regulator's decision to let Kalshi and Coinbase list crypto perpetuals, and it claimed Bitcoin perpetual futures are swaps, not futures.
The CFTC's conversion relief is temporary and conditional. A designated contract market must solicit feedback from participants holding open positions, provide advance notice, give customers an opportunity to exit and deliver appropriate risk disclosures. The exchange cannot use the conversion as an excuse to alter other material contract terms, and any amendment still needs to be filed under existing CFTC rules. The relief lasts only until October 20.
Kalshi has also filed with the CFTC to launch individual stock perps and to offer margin trading on event contracts to attract more institutional liquidity.
Background
Kalshi already offers 19 crypto perps, including Bitcoin, Ethereum and XRP. It launched gold and silver perps and continued to expand its crypto offering by launching Uniswap (UNI) perps last week.
Earlier this year, CFTC staff provided a route for converting certain digital-commodity perpetual-style futures into true perpetuals. Perpetual futures became a defining product of offshore crypto markets because they offer leveraged exposure without a fixed expiration date.
What is still unclear
- The reports do not state whether the CFTC's conversion relief will become permanent policy after its current window closes.
- CME's lawsuit concerns crypto perpetuals, and the reports do not say how it applies to index perpetual products.
- Kalshi's filings for individual stock perps and for margin trading on event contracts are not reported as approved.
Questions readers ask
What did the CFTC approve for Kalshi?
Kalshi has received the CFTC's approval to offer stock index perpetual futures, according to the regulator. The platform will begin by offering S&P 500 perpetual futures, extending beyond crypto and metal perps.
What is an S&P 500 perpetual future?
It is a cash-settled contract with no expiration date that tracks the MerQube US Large Cap Index, giving traders long or short exposure to the S&P 500. It uses periodic funding payments instead of a single settlement date.
How long does the CFTC's no-action relief last?
The relief lasts only until October 20, which makes it more of a controlled window than a permanent policy settlement.
Does Kalshi compete with CME?
The approval puts Kalshi in direct competition with traditional derivatives exchanges such as CME Group and Cboe Global Markets. CME had already sued the CFTC over its decision to let Kalshi and Coinbase list crypto perpetuals.
