Derivatives
Polymarket Launches Perpetual Futures for Oil and Other Assets, Competing with Kalshi
Polymarket, known for its betting platform on various events, has ventured into traditional finance with the launch of its Perps platform on September 3. This new offering includes perpetual futures contracts on a range of assets, such as Bitcoin, crude oil, and even SpaceX shares, positioning Polymarket in direct competition with Kalshi, which is also targeting the derivatives market.
Overview of Polymarket's Perps Platform
The Perps platform features nine markets, including BTC, ETH, SOL, gold, silver, WTI crude oil, the S&P 500, the Nasdaq 100, and SpaceX shares (traded under the ticker SPCX). Users outside the U.S. can trade with leverage of up to 20x. Unlike traditional futures contracts, perpetual futures do not have an expiration date, allowing positions to remain open indefinitely while being funded through periodic payments that keep the contract price aligned with the underlying asset.
Polymarket is promoting its platform by emphasizing its deep liquidity and low fees. However, U.S. users are excluded from trading due to a settlement with the Commodity Futures Trading Commission (CFTC) that restricts the platform from serving American traders.
Kalshi's Approach
In contrast, Kalshi is pursuing a regulated route by preparing a filing with the CFTC for a U.S. perpetual WTI crude oil contract. If approved, Kalshi's product would be the first oil perpetual contract available on a regulated U.S. exchange, trading 24 hours a day, five days a week.
The Shift from Event Markets to Continuous Trading
This shift from event-based contracts to perpetual futures reflects a broader trend in prediction markets seeking to establish continuous trading opportunities. Unlike event markets that are temporary, perpetual futures can generate ongoing trading activity and fees, appealing to a wider audience. The inclusion of SpaceX shares is particularly noteworthy, as it creates a synthetic public market for a company that remains private.
FAQ
What is the Polymarket Perps platform?
The Polymarket Perps platform is a new offering launched on September 3, 2023, that allows users to trade perpetual futures contracts on various assets, including Bitcoin, crude oil, and SpaceX shares.
How does trading on the Perps platform differ from traditional futures contracts?
Unlike traditional futures contracts that have an expiration date, perpetual futures do not expire, allowing positions to remain open indefinitely. They are funded through periodic payments that align the contract price with the underlying asset.
Who can trade on the Polymarket Perps platform?
Users outside the U.S. can trade on the Polymarket Perps platform with leverage of up to 20x. However, U.S. users are excluded from trading due to a settlement with the Commodity Futures Trading Commission (CFTC).
What assets are available for trading on the Perps platform?
The Perps platform features nine markets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), gold, silver, WTI crude oil, the S&P 500, the Nasdaq 100, and SpaceX shares (traded under the ticker SPCX).
How does Kalshi's approach to perpetual futures differ from Polymarket's?
Kalshi is pursuing a regulated route by preparing a filing with the CFTC for a U.S. perpetual WTI crude oil contract, which, if approved, would be the first oil perpetual contract available on a regulated U.S. exchange, trading 24/5.