Kalshi considers new instrument for copper bets after AI buildout boosts demand

Kalshi Inc. is eyeing plans to launch perpetual copper futures that would offer investors a new way to bet on the red metal as the artificial intelligence buildout boosts demand.

The move follows close on the heels of Kalshi’s push to expand precious-metals trading with a popular type of futures that never expire. 

“We’re strongly considering” copper and palladium “as the next offerings after the precious metals contracts,” Chief Risk Officer Udesh Jha said in an interview. “Copper has a very strong story correlated with what’s happening in the AI and computing marketplace, in addition to the natural uses of copper over these years.” 

The firm has yet to file for regulatory approval for the new copper instruments. Earlier this week, the company petitioned the Commodity Futures Trading Commission to allow an expansion of its perpetual contracts outside of crypto into gold, silver and platinum.

Perpetual futures, or “perps,” are derivatives with no expiration date that typically are traded on margin, allowing investors to take leveraged positions. Originally popularized in crypto markets, they have gained wider attention during the Iran war, where they’ve become one of the few ways for retail traders to gain around-the-clock exposure to oil prices when traditional bourses are closed.

Kalshi’s copper perps would enter an already crowded market for trading the industrial metal. The London Metal Exchange is the global benchmark for copper and other base metals, while New York’s Comex offers copper futures and options. Investors can also gain exposure through a range of exchange-traded funds. 

While perpetual futures let investors bet on an asset’s price without worrying about contract expirations, they are typically traded with borrowed money, magnifying gains and losses, and use periodic payments between traders to keep prices aligned with the underlying market.

(By Yvonne Yue Li and Jacob Lorinc)