The Misdirected Concern Over Perpetual Futures and Systemic Risk
The introduction of perpetual futures into regulated markets has sparked concerns about systemic risk due to their potential for high-leverage, retail-driven trading. However, the critique is misplaced, as the risk is inherent to the venue's design, not the contract. The venue's choices, such as leverage caps, margin requirements, and default management, dictate the level of risk. The contract it…