The traditional Friday afternoon mindset on commodity trading desks is undergoing a significant shift. Instead of winding down for the weekend, traders are now considering how to manage their risk exposure, given the ability to trade 24/7 in crypto markets. This change is largely driven by the growth of perpetual futures contracts, which allow traders to hedge their positions over the weekend. As a result, the long-standing 'weekend effect' in short-dated WTI options, where implied volatility is structurally depressed on Fridays, is beginning to narrow.
With the rise of continuous trading, traders can now capture profits over the weekend if the market becomes chaotic, rather than simply sitting on their positions. While institutional traders are still cautious, the increasing availability of perpetual contracts is creating new opportunities for traders to manage their risk and capitalize on market movements.
As the crypto market continues to influence traditional finance, the notion that weekends are a time for waiting may become a thing of the past.