Perpetual Futures Shake Up U.S. Derivatives Markets

Coming onshore: On Tuesday, the CFTC opened U.S. markets to perpetual futures on individual stocks. The regulator let applications from Kalshi, Coinbase and Kraken-owned Bitnomial pass without objection. Kalshi began trading the same day and has since handled more than $300 million in volume.

• Why it matters: The approval extends a push that Chairman Michael Selig made a CFTC priority in January. In ten months, the agency has approved perps on bitcoin, gold, silver, an equity index and now single stocks, without new legislation. The push targets the product at the center of crypto trading. Perps turned over nearly $62 trillion last year, more than three times spot volume, and almost all of that trading ran offshore.

A slow start at home: The U.S. market only opened in late May, when the CFTC approved Kalshi’s first bitcoin perps and let Coinbase offer U.S. institutions access to perps via Deribit, its Dubai-based derivatives exchange. After a slow summer, their combined weekly volume climbed past $40 billion in early October. Even that peak equals only about 3% of global crypto futures and perps volume, and most of it runs through Deribit.

Right now, U.S. perps are a fraction of a global market

The appeal reaches stocks: Perps owe their dominance in crypto to their design: they offer leverage, trade around the clock and never expire. The same design has found a second home in equities, where it lets traders take leveraged positions in single shares outside exchange hours. One of the biggest beneficiaries is trade[XYZ], whose markets on the onchain exchange Hyperliquid have processed more than $650 billion since October 2025.

ICE buys in: ICE is the first incumbent to buy into that business. Last week, the NYSE owner took a stake in trade[XYZ] and agreed to run its markets as a separate U.S. retail venue, pending approval. The venue would give ICE a new retail-focused futures business: its core markets, best known for Brent crude and interest-rate futures, are more than 99% institutional.

• “We see these perp markets as additive to our futures markets, not a replacement for them,” said Jeffrey C. Sprecher, Chair and CEO of ICE.

Incumbents push back: Not everyone welcomes perps as warmly as ICE. CME, the largest U.S. futures exchange operator, sued the CFTC in June over the agency’s bitcoin perp approval, arguing that contracts without an expiry date are swaps, which by law face stricter rules. Just hours after Tuesday’s announcement, the Capital Markets Alliance followed suit with the same case against stock perps, calling them security-based swaps that belong under SEC oversight. The newly formed alliance counts market maker Citadel Securities and options exchange operator Cboe among its members.

Retail business at stake: Both suits argue investor protection, yet CME’s complaint also says the new entrants “seek to compete with CME for retail customers” in futures markets. Cboe might face pressures as well: options, a product with similarly heavy retail use, produced $470 million of its $712 million in third-quarter net revenue. Perps offer similar leverage without strike prices to pick or contracts to roll over. That makes them simpler to trade and a direct rival for the same retail traders.

A first legal signal: Whether the incumbents’ arguments are enough to stop the CFTC’s onshoring push will likely be decided in court, and at least one judge sees the odds on their side. Despite declining an emergency halt of stock perp trading on Tuesday, U.S. District Judge Valerie Caproni found the alliance likely to succeed, since the contracts “appear to satisfy the definition of a swap.”

Outlook: But before any decision is made, the CFTC must answer the alliance’s request for a preliminary injunction by today, and the alliance has until November 10 to reply. An injunction would pause stock perp trading until the case is decided; without one, trading continues while the suit proceeds. With crypto market structure legislation stalled in the Senate, U.S. perps will likely continue to rest on agency decisions that a judge or a future Commission can reverse.

Dr. Hagen Weiss is Digital Assets Lead at PwC Legal in Germany, advising financial institutions and technology companies on digital asset regulation, blockchain and financial market infrastructure.

What dynamics are you seeing among European players in perpetual futures, and how is the U.S. push affecting the market?

In our advisory work, we see firms increasingly looking to the U.S. to establish perpetual futures businesses. Regulators there provide a more business-friendly approach to market participants to bring offerings onshore, drawing expertise away from Europe even as firms remain interested in serving European customers.

Europe's challenge lies in its more restrictive regulatory approach. Its derivatives framework offers important investor protections, but licensing costs, infrastructure requirements and retail leverage restrictions can make certain offerings less competitive.

Still, these hurdles can be overcome. Dutch platform One Trading demonstrates this: it secured a MiFID II trading venue license and integrated trading and settlement, reducing reliance on conventional clearing infrastructure and its costs subject to EMIR and MiFID II requirements.

We also have clients actively exploring alternative structures. One possible approach combines licensed trading and clearing with blockchain-based settlement and collateral management.

Yet replicating such models requires navigating complex licensing, developing suitable infrastructure and building a commercially viable business. Without a clear regulatory and legislative pathway for innovation, Europe risks losing further momentum, expertise and business to more accommodating jurisdictions like the U.S.