The Misguided Debate Over Perpetual Futures and Systemic Risk
The introduction of perpetual futures to regulated markets has sparked concerns about systemic risk, driven by high-leverage, retail-driven instruments. However, this criticism is misplaced, as the risk is inherent to the venue's design, not the contract. The actual risk factors include leverage caps, margin rules, funding design, and default management, which are not inherent to perpetual contra…