A new type of bet originating in the crypto world is setting off a fierce battle on Wall Street. A group backed by Citadel Securities and Cboe is suing over the approval of single-stock perpetual futures, commonly called perps.
The lawsuit targets the regulatory decision that allowed these products to be offered. Supporters of the perps argue they give traders a flexible way to take positions on individual stocks, a feature that has made them popular with retail investors who are already familiar with crypto trading.
Critics, including the plaintiffs, contend that the products could expose investors to risks that existing market structures are not designed to handle. Perpetual contracts have no fixed expiration date, which allows positions to be held indefinitely, and they often use leverage that can magnify both gains and losses.
The dispute highlights a broader tension as traditional exchanges and crypto-native platforms compete for the same customers. How the courts and regulators resolve the case could shape which products reach mainstream brokerage accounts in the months ahead.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing