Brokers see buying opportunity after exchanges dip on perpetual futures approval
CBOE•Shares of Cboe Global, CME Group, Nasdaq and Intercontinental Exchange fell after a US regulator cleared a path for single-stock perpetual futures. TD Cowen viewed weakness in Cboe, Nasdaq and CME as a buying opportunity, while Cboe and a Citadel Securities-backed group filed a lawsuit seeking to block the products.
1. Exchanges face new competition
Shares of Cboe Global, CME Group, Nasdaq and Intercontinental Exchange were pressured on Tuesday after a US regulator cleared a path for single-stock perpetual futures to trade in the United States as security futures products. TD Cowen saw the weakness as a buying opportunity for Cboe, Nasdaq and CME.
2. Analysts weigh the impact
Piper Sandler said the move was constructive for derivatives venues seeking to bring crypto-style products onshore and a major step for challenger venues. Analysts led by Patrick Moley said they viewed the products as more of an opportunity to bring a new cohort of risk-seeking retail traders into US equity markets than an immediate threat to traditional exchanges’ equity and options businesses.
3. Cboe seeks to block approval
Perpetual futures are derivatives that do not expire, allowing traders to hold positions indefinitely without rolling them over. Cboe and a Citadel Securities-backed group filed a federal lawsuit on Tuesday seeking to block the US Commodity Futures Trading Commission from authorizing single-stock perpetual futures.
