The Misdirected Debate Over Perpetual Futures and Systemic Risk
The introduction of perpetual futures to regulated markets has sparked intense debate, with many warning of the potential for systemic risk due to high-leverage trading. 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, index construction, and default management, which are not inheren…