The Misguided Debate on Perpetual Futures and Systemic Risk
The introduction of perpetual futures into regulated markets has sparked a heated debate, with critics warning of the potential for systemic risk. However, this criticism is misplaced, as the risk is not inherent to the contract itself, but rather a result of the venue's design. The venue's choices, such as leverage caps, margin rules, and default management, are the primary factors that contribu…