Oct 6 (Reuters) – Prediction market startup Kalshi launched a stock index perpetual future on Tuesday, broadening the reach of the nascent derivatives instrument as it looks to challenge traditional exchange operators.
Here are some more details:
• The contract will track a Kalshi index, US 500, housing 500 of the largest companies in the US, the company said
• Perpetual futures, or perps, are derivatives that lack a traditional expiration date, allowing traders to hold positions indefinitely without rolling over contracts
• Funding rates will keep the contract’s price in line with the index, Kalshi said
• A funding rate is a periodic fee exchanged between traders holding long and short positions in perpetual future contracts
• Kalshi, which allows people to wager on the outcome of events, including sports and elections, said the contract would let investors take leveraged long or short positions on the index
• The company had filed with the Commodity Futures Trading Commission for such a vehicle in August
• “Stock market exposure is the next step towards Kalshi becoming a full-service financial exchange, and perps are the best way for our traders to get this exposure,” CEO Tarek Mansour said in a statement
• Kalshi is also preparing to file for a perpetual West Texas Intermediate crude oil contract with US regulators, Reuters reported last month citing a source familiar with the matter, as the company works to expand beyond cryptocurrency and metals
(Reporting by Pritam Biswas and Anirban Sen in Bengaluru; Editing by Shilpi Majumdar)
