Kalshi launches stock index perpetual future to expand product suite

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)