Judge denies bid to halt stock perpetuals but says challengers likely to win core claim

A federal judge in New York on November 3, 2026, refused to temporarily block the CFTC’s approval of perpetual derivatives on single stocks, while finding that the trade group challenging them is likely to win its core claim. U.S. District Judge Valerie Caproni denied the Capital Markets Alliance Association’s request for a temporary restraining order in a three-page order issued after a teleconference with the parties.

The Alliance sued the CFTC and Chairman Michael Selig on November 2. It asked the court to stay the agency’s approvals of applications from KalshiEX, Bitnomial Exchange and Coinbase Derivatives to trade perpetual derivatives on single stocks, and to stop the CFTC from giving them effect while the case runs.

Why the request failed

A restraining order requires four showings: likely success on the merits, likely irreparable harm without relief, a balance of equities in the plaintiff’s favor, and a public interest served by an injunction. The Alliance cleared three and missed one.

On harm, the court found the declarations filed with the motion “conjectural.” They focus on harmful events that could occur, the order says, rather than harm the group’s members are likely to suffer. The standard requires harm that is “neither remote nor speculative, but actual and imminent.”

What the judge said about the merits

The more pointed findings went the other way. Caproni wrote that the Alliance is likely to succeed on its claim that the CFTC lacks statutory authority to allow perpetual derivatives on individual stocks to be offered to retail investors on CFTC-regulated platforms.

The reasoning turns on the definition of a security future. Because perpetual contracts do not provide for a “sale for future delivery of a single security,” they do not appear to be security futures under the Commodity Exchange Act. They appear instead to meet the definition of a swap, which the order places under the Securities and Exchange Commission rather than the CFTC.

The judge also found that the balance of equities and the public interest favor the Alliance. “The CFTC’s actions seem to represent a major disruption to the equities market,” the order says, adding that the public would be served by preventing it “before it occurs.”

What comes next

The fight now moves to the Alliance’s motion for a preliminary injunction. The government’s opposition is due Friday, November 6, and the Alliance’s reply on Tuesday, November 10, a schedule the order says the assigned judge may change.

As of November 5, the approvals for Kalshi, Coinbase and Bitnomial remain in effect, since no order blocks them. The court’s merits finding is preliminary, but it means the CFTC goes into the injunction briefing with a judge who has already found the challengers likely to succeed on their claim that the agency lacked the authority to approve these contracts.

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