Summary

  • US prediction-market platform Kalshi said daily Nvidia trading volume topped $100 million after it introduced stock-based perpetual futures.
  • Kalshi said it is drawing demand from retail investors and hedge funds by offering as much as 4.6x and 3.5x leverage on 50 companies including Nvidia, Micron and SpaceX.
  • Amid a regulatory dispute involving CME, Cboe, the CFTC and the SEC, the legal nature of stock perpetual futures and investor protection have emerged as the central issues.

Forecast Trend Report by Period

Stock perpetual futures are surging on Kalshi, with Nvidia daily volume topping $100 million.

Stock-based perpetual futures launched by US prediction-market platform Kalshi are expanding rapidly.

Bloomberg reported on Nov. 15 that Kalshi’s stock perpetual futures, introduced on Nov. 5, are drawing interest from retail investors and hedge funds amid uncertainty over the artificial-intelligence industry outlook and increased stock-price volatility. Perpetual futures allow investors to trade price swings without directly holding the underlying asset. Unlike standard futures, they have no expiration date.

Kalshi offers perpetual futures tied to 50 major companies, including Nvidia, Micron and SpaceX. Trading volume in Nvidia-linked contracts topped $100 million over a 24-hour period as of Nov. 12. Micron volume also exceeded $100 million on Nov. 9. SpaceX recorded as much as $88 million in daily volume.

High leverage is also helping drive demand. Kalshi offers as much as 4.6 times leverage on Nvidia and up to 3.5 times on Micron and SpaceX. That allows investors to bet on stock-price moves with a relatively small margin deposit instead of buying shares outright, though losses can also widen if prices move against them.

Perpetual futures have until now traded mainly on offshore crypto exchanges. Noel Kimmel, president of Ripple Prime, said more than two-thirds of trading volume at four major overseas digital-asset exchanges comes from perpetual futures. The products traded have recently expanded to stocks, crude oil and gold, and he expects that growth to continue.

Traditional financial exchanges, however, are raising concerns about the legal nature of stock perpetual futures and investor protection. CME Group, Cboe and Citadel Securities have sued the Commodity Futures Trading Commission, arguing that securities-related rules should apply to stock perpetual futures.

The central question is whether perpetual futures should be treated as futures contracts or classified as swaps. CME argues the products are swaps rather than futures and should therefore face stricter regulation under the Dodd-Frank Act. CME Chief Executive Officer Terry Duffy warned that retail investors could be exposed to excessive risk.

Kalshi pushed back, saying it complies with CFTC oversight standards and that its leverage limits are lower than those at other regulated exchanges. Rob Hocking, Cboe’s head of global derivatives, said the CFTC framework is not sufficient from the standpoint of securities investor protection. As the market for stock perpetual futures grows, the debate over regulatory jurisdiction between the Securities and Exchange Commission and the CFTC is set to continue.

Suehyeon Lee