Judge gives CFTC until Friday to defend stock perps listings
CFTC response due Friday in stock perps fight
The CFTC must respond by Friday, November 6, to a lawsuit challenging stock perpetuals. A US district judge said the trade group bringing the case is likely to succeed on the merits.
Stock perps are a type of derivative. They let traders bet on a stock price with leverage, without owning the stock. Leverage means using borrowed money to increase the size of a trade.
The case could affect listings at Kalshi, Coinbase Derivatives and Bitnomial Exchange if the court grants the group's motion.
Key points from the case
- Judge Valerie Caproni ordered the CFTC to respond by Friday, November 6.
- Caproni said she leans toward finding the CFTC lacks statutory authority to allow perpetual derivatives on individual stocks for retail investors.
- The Capital Markets Alliance filed the lawsuit in Manhattan on Tuesday.
- Kalshi listed single-stock perps on Tuesday, including Costco, McDonald's, Qualcomm and Amgen, at up to 4.9x leverage.
- The Kalshi roster has since grown to dozens of stock perps, including Nvidia, Tesla and SpaceX.
What the court and the filing show
The Capital Markets Alliance, which counts CBOE and Citadel Securities among its members, is seeking to halt approvals for stock perps listings.
The group alleged that CFTC regulations allowed a parallel, synthetic market in US stocks outside the exclusive jurisdiction of the SEC. It said US stock markets trade over $1 trillion daily.
Caproni denied an immediate restraining order over what she called conjectural harm declarations, but she found the group likely to succeed on the merits of its claim.
How the listings were proposed
On September 18, 2026, KalshiEX, Coinbase Derivatives and Bitnomial Exchange submitted applications to list cash-settled US equity perpetuals.
Coinbase Derivatives proposed a suite anchored by Apple stock. Bitnomial filed for Alphabet stock and added Apple stock among its 10 stock perpetuals.
The CFTC's 45-day review clock expired on November 2 without sufficient objection. The next morning, CFTC Chairman Michael Selig described the launch of perps on US exchanges as an opportunity to pull traders from offshore venues that are often unregulated. Kalshi launched several stock perps that day.
What the judge has said so far
Caproni said single stock perps seem to represent a major disruption to the equities market.
She also set the alliance's reply for this month. Her preliminary view is that the CFTC lacks statutory authority for this type of offering to retail investors, but the CFTC can argue that conclusion is wrong in its response.
Why this matters for US stock markets
The alliance argues stock perps create a separate market in US stocks outside SEC jurisdiction. If the court grants its motion, dozens of stock perps at venues like Kalshi, Bitnomial and Coinbase could face suspension, according to the source material.
What happens next
Tomorrow, the CFTC must convince the court that Caproni's preliminary conclusion is wrong if it wants to file an opposition. The response is due by Friday, November 6.
Where this information comes from
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.