The Misguided Debate Over Perpetual Futures and Systemic Risk
The introduction of perpetual futures into regulated markets has sparked concerns about systemic risk, driven by high-leverage retail trading. However, this critique is misdirected, as the risk is inherent to the venue's design, including leverage limits, margin rules, and default handling, rather than the perpetual contracts themselves. The real issue is how a venue is constructed, with regulato…