A significant shift is taking place in the world of trading, as the rise of 24/7 crypto markets is changing the way Wall Street traders approach their weekends. For decades, traders have had to wait until markets reopened on Sunday evening to adjust their positions, but with the advent of perpetual futures and other crypto derivatives, they can now trade around the clock. This development has major implications for the traditional 'weekend effect' in short-dated WTI options, where implied volatility is structurally depressed on Fridays due to traders' inability to hedge their positions over the weekend. However, with perpetual contracts available, traders may be willing to hold or even buy options they previously would have sold before Friday's close, potentially creating new opportunities for profit.
While institutional traders have yet to fully embrace this new paradigm, crypto-native firms, proprietary trading shops, and savvy retail traders are already taking advantage of these 24/7 markets. As the financial infrastructure underlying these markets continues to evolve, it's likely that traditional finance will be influenced by crypto innovations, and the old routine of waiting for the weekend to pass may become a thing of the past.