A federal judge in New York refused on Tuesday to shut down trading in single-stock perpetual futures, allowing the controversial contracts to keep trading on Kalshi, Coinbase and Bitnomial — while warning that the Commodity Futures Trading Commission probably had no legal authority to approve them in the first place.

US District Judge Valerie Caproni denied an emergency temporary restraining order sought by the Capital Markets Alliance Association, a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association. The group sued the CFTC last week, saying the regulator overstepped by letting the products reach retail investors.

Key Points

• Judge Valerie Caproni denied an emergency restraining order on Tuesday, November 3, 2026, so single-stock perpetual futures keep trading on Kalshi, Coinbase Derivatives and Bitnomial.
• Caproni found the alliance is "likely to succeed on the merits" of its claim that the CFTC lacked authority to approve the products for retail investors.
• The judge said perpetual contracts do not provide for a "sale for future delivery of a single security" and instead look like swaps, which the SEC regulates.
• The order was denied only because the group failed to show imminent irreparable harm, not because the judge sided with the CFTC.
• The CFTC says the contracts were deemed approved under Regulation 40.3 after the 45-day review lapsed; by Wednesday, Kalshi listed four single-stock perpetuals at up to 4.9x leverage.

What Happened

The case, Capital Markets Alliance Association v. CFTC (No. 1:26-cv-09608, S.D.N.Y.), names the CFTC and chairman Michael S. Selig. The alliance sought emergency relief to stop trading.

Caproni turned down the request, but her reasoning gave the alliance most of what it wanted. She found the group is likely to prove the CFTC lacked authority to approve single-stock perpetuals for retail investors, putting the products' future in doubt even as trading continues.

Next, Judge Lorna G. Schofield, assigned to the case, will weigh a preliminary injunction. The CFTC's opposition is due Friday, November 6, and the alliance's reply on Tuesday, November 10. An injunction would halt trading while the case proceeds.

The CFTC says the contracts were deemed approved under Regulation 40.3, which lets an exchange list a new product if the regulator does not object within 45 days. The exchanges filed on September 18 and the review period ended on November 2. By Wednesday, Kalshi listed four — Qualcomm, McDonald's, Amgen and Costco — at up to 4.9x leverage.

Background and Context

Perpetual futures, known as "perps," track the price of an asset without an expiry date. They became a fixture of cryptocurrency trading, where traders take leveraged positions that never expire. Applying the same structure to single US stocks is new — and it makes this case a test of where American financial regulation draws its lines.

Kalshi, Coinbase Derivatives and Bitnomial each moved to list the products this autumn, betting on demand for leveraged exposure to single stocks, and filed with the CFTC rather than the SEC.

That choice of regulator is the heart of the dispute. The alliance argues the products are not futures at all: the CFTC had no power to let them reach retail investors, and the correct regulator is the SEC. Kalshi is already fighting Utah, which filed 14 criminal counts against it in late October, alleging illegal gambling, as we reported here.

Stock Perpetuals and the Fight Over Who Regulates Them

The judge's reasoning turns on one legal distinction. A traditional futures contract involves a sale for future delivery of an asset. A perpetual contract has no delivery date and no expiry, so Caproni said it is not a "sale for future delivery of a single security" and instead looks like a swap.

That matters because swaps on single securities fall under the SEC's jurisdiction, not the CFTC's. If the products are swaps, the CFTC's approval route — a lapsed 45-day review — was the wrong door, and the exchanges would need to meet the SEC's registration and investor-protection rules before offering them to retail traders.

The ruling does not settle the question: "likely to succeed" is a preliminary assessment, and the CFTC will now argue the other side. But it is a strong early signal — the judge who kept the products trading also told the market she thinks the challenge will probably win.

Reactions and Quotes

Caproni's order was blunt about the law and narrow about the remedy. She found the alliance "likely to succeed on the merits," yet refused the emergency halt because the group had not shown the imminent, irreparable harm that an emergency restraining order requires. Trading continues, but under a cloud.

The CFTC says the contracts were deemed approved under Regulation 40.3 once the 45-day review period lapsed on November 2, and it will defend that reading in its opposition due on Friday.

Why It Matters

For retail traders, the stakes are immediate. The four contracts live on Kalshi — Qualcomm, McDonald's, Amgen and Costco — offer up to 4.9x leverage, so a small share-price move produces a much larger gain or loss. A court decision months from now that pulls them from the market would leave traders to unwind positions in a hurry.

For the industry, the case will decide whether crypto-style derivatives can migrate into US equities through the CFTC's door. If the alliance wins, exchanges must route single-stock products through the SEC; if the CFTC wins, the door opens for perpetuals on dozens more stocks. Markets have been volatile around the midterms — see our report on Wall Street's rally as Democrats took Congress.

What Happens Next

The next dates are set. The CFTC's opposition to a preliminary injunction is due on Friday, November 6, the alliance replies on Tuesday, November 10, and Judge Schofield will then decide whether trading should stop while the case is fully litigated.

If she grants an injunction, the four contracts would be suspended pending a final ruling. If she refuses, trading continues while the merits are argued — a process that could take months and, if the alliance's early win holds, end with the products withdrawn or restructured under SEC rules.

Frequently Asked Questions

What is a stock perpetual?

A perpetual futures contract that tracks one company's share price, with no expiry date. Traders take leveraged positions without owning the shares or rolling the contract over.

Why did the judge refuse to halt trading?

Judge Caproni denied the emergency order because the alliance failed to show imminent irreparable harm. It does not mean the CFTC will win.

Who sued the CFTC?

The Capital Markets Alliance Association, a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association.

Which stocks can be traded as perpetuals right now?

On Kalshi, four were listed by Wednesday morning: Qualcomm, McDonald's, Amgen and Costco, at up to 4.9x leverage. Coinbase Derivatives and Bitnomial also offer them.

What happens next in the case?

The CFTC's opposition is due Friday, November 6, the alliance's reply is due Tuesday, November 10, and Judge Lorna G. Schofield will decide whether trading should be halted while the case proceeds.