Institutional demand for perpetual futures remains limited, with the products largely viewed as speculative trading instruments rather than viable replacements for traditional derivatives, according to a Monday report by Wall Street bank JPMorgan.

Based on conversations with clients and market participants, the bank said institutional interest in perpetuals has been muted. While the contracts offer 24/7 trading and eliminate futures roll costs, most activity is driven by traders seeking leveraged directional exposure rather than producers, consumers or other participants hedging underlying market risk.

“Our due diligence within J.P. Morgan suggests that there is no/limited institutional demand that our desks are seeing,” the bank’s…