A prediction markets platform that lets users place bets on everything from sports outcomes to election results and weather events is now pushing to bring a new type of financial product to a much wider range of markets.
Kalshi, which allows trading on various event outcomes, is working toward offering so-called perpetual futures — derivatives contracts that never expire — in areas such as metals, foreign exchange, and energy markets, according to a company executive.
Unlike traditional futures contracts, which have a set end date, perpetual futures allow investors to hold a position in an asset indefinitely without ever having to close it out or roll it over. These contracts, often called “perps,” also allow traders to borrow heavily — sometimes up to 50 times the value of the contract — to magnify their bets.
Kalshi made history in May when it launched the country’s first perpetual futures contracts for cryptocurrency trading, following a green light from the Commodity Futures Trading Commission, or CFTC. The company is now asking the same regulator for permission to extend those products into other financial categories.
“The other asset classes that we’re looking at are very much driven by the market, for instance, things like gold,” said Udesh Jha, chief risk officer at Kalshi.
Jha said the company is deep in conversations with regulators about expanding into foreign exchange and energy markets as well. “Gold is something that’s coming up because it’s retail friendly. Our participants skew towards the retail side, but also institutional,” he added.
The executive also said Kalshi has its eye on eventually offering perpetual futures tied to broad stock market indexes and individual company shares. Since the platform first introduced perpetual contracts, trading volume in those products has reached $16.1 billion.
“Most of those asset classes we have to figure out how to enter, but FX, metals, and energy are probably the ones that because of geopolitics and seasonality are the most in demand from investors,” Jha said. “If you look at the volumes that we have, a lot of that is coming primarily from institutional investors.”
Not everyone is enthusiastic about the growth of these products. Critics have raised alarms that perpetual futures are too complicated and too risky for everyday investors, who could face steep losses even when prices shift by only a small amount. The outgoing chief executive of CME, Terry Duffy, publicly blasted the CFTC in June for allowing perps to be listed, calling them a “disaster waiting to happen.”
CME has since filed a lawsuit against the CFTC and its chairman, Michael Selig, challenging the regulator’s decision to allow Kalshi and cryptocurrency exchange Coinbase to list perpetual futures. Many observers viewed the legal action as an effort by CME to protect its standing as the leading derivatives exchange in the United States.
The news rattled financial markets as well. After the CFTC initially approved perpetual futures, shares of major U.S. exchange operators — including CME, CBOE, Nasdaq, and Intercontinental Exchange, the parent company of the New York Stock Exchange — dropped sharply as investors worried about rising competition.
In June, Kalshi co-founder Tarek Mansour had signaled to Bloomberg that the company intended to grow its perpetual futures business but did not specify which markets it would target next.
The CFTC is currently gathering public feedback on whether to allow perpetual contracts tied to physical or storable energy products, such as crude oil, the agency announced in June.
If regulators approve trading in these new categories, the contracts would be available during standard market hours rather than around the clock, according to a source with knowledge of the discussions who was not authorized to speak publicly since the products are still being reviewed.
Until recently, perpetual futures were mostly traded on offshore platforms and existed in a murky regulatory space — not explicitly banned, but not officially sanctioned either. Kalshi has estimated that trading in perps on overseas exchanges ballooned to $90 trillion last year, more than three times the volume recorded in 2023.
