Kalshi wins CFTC approval for a US500 perpetual future: never-expiring stock index contracts arrive onshore in America

A contract that never expires, tracks America's 500 largest companies and trades almost around the clock is now available on a US-regulated exchange. Kalshi received approval from the Commodity Futures Trading Commission for its US500 perpetual future and opened trading less than two months after submitting the product for review. The contract extends Kalshi's perpetual futures, previously offered on cryptocurrencies and metals, into US equities.

Perpetual futures have been the dominant product on offshore crypto exchanges for years. Their arrival onshore, on a stock index and under CFTC oversight, matters well beyond Kalshi. It brings a product that behaves much like a CFD into the regulated US futures framework, and it adds pressure on traditional exchanges and brokers that have built their businesses around dated contracts and over-the-counter derivatives.

How the US500 perpetual works

The contract references the MerQube US Large Cap Index, which covers the 500 largest US-listed and US-domiciled companies by float-adjusted market capitalisation. It uses the price-return version of the index, so holders do not receive dividends or voting rights. The contract is cash-settled and has no expiry or delivery date.

To keep the contract's price close to the index, longs and shorts exchange a daily funding payment. Kalshi sets the funding rate at 4 p.m. on each index business day. When the contract trades above the index, longs pay shorts, and when it trades below, shorts pay longs. That mechanism replaces the rollover from one expiry to the next that holders of dated futures must manage.

Each contract carries a 1 dollar multiplier per index point, and fractional positions as small as one ten-thousandth of a contract are allowed. That makes the product accessible to small accounts in a way that full-size index futures are not. Trades are centrally cleared by Kalshi Klear, with initial and maintenance margin set by a risk-based model.

• Underlying: MerQube US Large Cap Index, price-return version.
• Expiry: none. Cash-settled with daily funding between longs and shorts.
• Funding: rate set at 4 p.m. ET each index business day.
• Size: 1 dollar per index point, fractional down to 0.0001 contracts.
• Hours: 6 p.m. ET Sunday to 5 p.m. ET Friday.
• Clearing: Kalshi Klear, risk-based margin.

Index choice matters here. By using the MerQube US Large Cap Index rather than a licensed S&P 500 benchmark, Kalshi can offer broad large-cap exposure without paying for the most famous index brand. For most traders the difference in performance between large-cap US indexes is small, but the distinction explains why the product is called US500 rather than S&P 500.

Trading when the index is closed

The contract trades from 6 p.m. Eastern on Sunday to 5 p.m. Eastern on Friday, but the index is only calculated during regular US equity hours. Outside those hours, the contract trades against the last published index level, and overnight moves are excluded from the funding calculation.

That design creates both opportunity and risk. Traders in Asia and Europe can take positions during their own daytime, reacting to news before New York opens. But the price they trade at overnight reflects expectations rather than a live index, and a large gap at the US open can move positions sharply.

At the time Finance Magnates reported the launch, 24-hour volume was about 556,000 dollars, open interest stood at 219,600 dollars and available leverage was 15.3 times. Those are early figures for a new product and will change, but they show that leverage on the contract is meaningful and that liquidity is still building.

Kalshi has taken the most popular product in offshore crypto, put it on a stock index and wrapped it in CFTC oversight.

Why Kalshi says perpetuals beat dated futures

Kalshi argues that stock index perpetuals offer greater capital efficiency, make short positions easier and avoid the rollovers that dated futures require. A trader who wants to hold an index position for months does not need to sell one contract and buy the next each quarter, paying spreads and managing basis each time.

It also argues that a single perpetual contract concentrates liquidity rather than spreading it across several expiry dates. In dated futures markets, volume clusters in the front month, but liquidity still fragments around rolls. One perpetual contract can collect all trading interest in a single order book.

There are counter-arguments. Funding payments can become expensive in strongly trending markets, and the economics of a perpetual depend on how funding is calculated. CME has said it sees no future for a never-expiring S&P 500-style contract, according to a headline cited by Finance Magnates, suggesting incumbents remain sceptical about demand.

Regulators have been moving in the same direction. Finance Magnates' weekly review noted that the CFTC has moved to allow perpetual index futures, and Coinbase's derivatives arm has offered perpetual-style crypto contracts to US users. Each approval makes the next one easier, as regulators gain experience with how funding mechanisms behave.

How it compares with offshore perps and CFDs

Offshore venues already offer exposure to US stock indexes through perpetuals. Trade[XYZ] offers a Hyperliquid-based perpetual referencing the licensed S&P 500 index to eligible non-US clients, and Binance and Bybit offer SPYUSDT perpetuals that track the SPDR S&P 500 ETF rather than the index itself. Those products have been popular with traders outside the United States.

For retail traders in many countries, the most similar product is a CFD on a US stock index. CFDs also have no expiry, charge or pay overnight financing, allow fractional sizes and trade nearly around the clock. The key differences are structural. A CFD is a bilateral contract with a broker, while Kalshi's perpetual is traded on an exchange and centrally cleared.

That difference matters for counterparty risk and transparency. On an exchange, prices are formed in a central order book and the clearing house stands between buyers and sellers. With a CFD, the broker sets prices and may take the other side of the client's trade. We explored how that model affects broker results in our analysis of IG's revenue retention.

What it means for brokers and exchanges

For US brokers, the product offers a regulated way to give clients CFD-like exposure that has historically been unavailable onshore. Expect brokers and trading apps to explore access to perpetual futures as the CFTC framework matures, and expect more exchanges to file similar products.

For CFD brokers outside the US, the competitive threat is longer term. If exchange-traded perpetuals on major indexes become available to retail traders internationally, they offer a transparent, centrally cleared alternative to bilateral CFDs. Brokers may respond by offering access to such contracts themselves, or by competing on service, education and pricing.

For crypto exchanges, Kalshi's move blurs the line further between crypto and traditional markets. Nasdaq's investment in One Trading, which offers perpetual futures on equities in Europe, and CME's weekend crypto trading point the same way: always-on, perpetual-style markets are moving from the crypto fringe into mainstream finance. We cover the Nasdaq and One Trading deal later this week.

There is also a distribution angle. Kalshi built its user base on event contracts about elections, economics and sports, attracting a younger audience that may never have opened a brokerage account. Offering stock index perpetuals to that audience turns a prediction market into something closer to a multi-asset trading venue. Our earlier look at Kalshi's path into the mainstream traced how fast that audience grew.

The risks retail traders should understand

Perpetual futures are leveraged products, and leverage magnifies losses as well as gains. At 15 times leverage, a move of less than 7 percent against a position can wipe out its margin. Traders need to understand margin calls, liquidation rules and how funding payments accumulate over time.

Overnight trading adds risk. Because the index is not calculated outside US hours, prices overnight can diverge from where the market opens. Thin liquidity in a new contract can also mean wider spreads and slippage, particularly during volatile news events.

Finally, traders should understand the product they are buying. A price-return index contract pays no dividends, and funding can turn against a position during long trends. Reading the contract specifications before trading is essential.

Kalshi's US500 perpetual is a small contract with a large implication. A product that has driven offshore crypto trading for years is now available on a CFTC-regulated exchange, applied to the most widely followed stock index in the world. Liquidity is still building and incumbents remain sceptical, but the direction is clear: perpetual, always-on derivatives are entering the regulated mainstream, and brokers and exchanges that ignore them risk being left behind.