By the end of the week, commodity traders typically shift their focus from profit-making to risk management, as they cannot adjust their positions until markets reopen on Sunday evening. However, the rise of perpetual futures contracts on crypto exchanges has created a 24/7 venue for trading, allowing traders to hedge their bets over the weekend. This development has implications for the pricing of short-dated West Texas Intermediate crude options, as traders can now capture profits over the weekend if the market becomes chaotic. While institutional traders have shown interest in perpetual contracts, they are hindered by the lack of meaningful liquidity and the need for a different infrastructure to support 24/7 trading.
Nevertheless, perpetual futures are starting to influence traditional markets, providing an additional source of price discovery and potentially reshaping the way traders behave.