TLDR
- Kalshi launched single-stock perpetual futures on more than 50 NYSE and Nasdaq stocks on Nov. 5.
- The company reported more than $300 million in volume within hours, a figure that is not audited.
- SpaceX contracts led trading with about $88 million in 24-hour volume.
- Cboe and Citadel Securities sued, saying daily funding payments make the contracts swaps.
- Kalshi is also fighting gambling-related actions in more than 20 states.
A daily cash payment made at 4:00 p.m. ET is at the center of a new legal fight over Kalshi’s latest product. The prediction market operator launched single-stock perpetual futures on Nov. 5. Rival firms now say that payment makes the contracts swaps, not futures.
Kalshi listed perps on more than 50 stocks traded on the NYSE and Nasdaq. The company said the contracts drew more than $300 million in volume within hours of a quiet launch. That figure is self-reported and has not been audited.
Contracts tied to SpaceX led early trading with about $88 million in 24-hour volume. That equals nearly 30% of Kalshi’s headline launch number, though the two figures cover different time windows.
Other names on the list include Palantir, Meta, Nvidia and McDonald’s. Barchart described the rollout as the most direct challenge yet from prediction markets to established equity-derivatives firms.
How the Daily Payment Works
A perpetual future is a contract that never expires. To keep its price close to the real stock, traders on one side pay traders on the other side at set times. This transfer is called a funding payment.
On Kalshi, the funding payment happens once a day at 4:00 p.m. ET. Each contract represents 0.02 shares and settles in cash, so no actual stock changes hands.
Leverage on the product is capped near 5x. Offshore platforms commonly offer 50x to 100x on similar contracts.
The CFTC cleared the products as security futures. They fall under joint oversight by the CFTC and the SEC.
The launch came shortly after Micron fell 23% in two days following the midterm elections. The drop was part of a broad selloff in AI-related stocks.
Why Cboe and Citadel Securities Say the Contracts Are Swaps
A group that includes Cboe and Ken Griffin’s Citadel Securities has filed a lawsuit over the product. The group argues that the funding payments meet the definition of a swap under the Dodd-Frank Act.
A swap label would bring stricter rules on margin, capital and reporting. It would also limit how easily retail traders can access the contracts.
The group has also warned about specific risks tied to perps. These include automatic liquidation cascades, margin calls around the clock and price gaps when markets reopen.
CME Group has filed a separate lawsuit over crypto perpetual futures that makes a similar argument. Regulators have described the legal challenges as protectionism by established firms trying to avoid competition.
According to Barchart, the classification dispute could eventually reach the Supreme Court. The outlet said early volume figures should be treated as provisional until the question is settled in court.
Kalshi also faces legal pressure at the state level. The company is fighting gambling-related actions in more than 20 states, including Arkansas and Utah.
The political setting has also changed, with Democrats taking control of Congress. Barchart reported that closer oversight is likely next year.
Kalshi is also filing with the SEC to shorten listing timelines for newly public companies. The filing would let the company add new stocks to its perps lineup faster.
