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 and retail-driven instruments. However, this critique is misplaced, as the risk is inherent to the venue's design, including leverage limits, margin rules, and default handling, rather than the contract itself. The real issue is how a venue is built, with regulatory requi…