WASHINGTON, D.C.: Perpetual futures contracts tied to individual company stocks can begin trading on properly registered U.S. commodity markets, the country's derivatives regulator said November 3, opening another avenue for prediction-market platforms to expand into traditional Wall Street territory.

The decision comes as platforms including Kalshi and Polymarket look beyond event contracts to perpetual futures as a separate source of growth.

Known as "perps," perpetual futures are derivative contracts with no expiry date, allowing traders to hold positions indefinitely without rolling them over.

The contracts can also involve high levels of leverage, increasing both potential gains and losses.

Michael Selig, chairman of the U.S. Commodity Futures Trading Commission, said allowing the products on regulated markets would give investors access to them within the U.S. regulatory system.

Bringing perps onto regulated markets "ensures that American investors and traders can access these products within the protections of the CFTC's proven regulatory framework," Selig said, rather than encouraging offshore markets.

Prediction-market platforms primarily allow users to trade event contracts that pay out depending on the outcome of sporting events, elections, and other events.

Offering perpetual futures provides another potential growth avenue as such platforms increasingly move into areas traditionally dominated by established Wall Street firms.

CFTC-registered markets seeking to offer trading in single-stock perpetual futures will also have to register by filing notice with the Securities and Exchange Commission to trade in security futures, according to the CFTC statement.

The regulatory move comes amid an existing legal dispute over the CFTC's approach to perpetual futures.

The Chicago Mercantile Exchange sued the CFTC in June over the regulator's earlier decision to allow prediction-market platform Kalshi and cryptocurrency exchange Coinbase to list perpetual futures in digital assets.

CME argued that the CFTC had exceeded its legal authority in allowing the products. The regulator rejected that allegation.