Introduction

Perpetual futures are complex and risky. The CME Group, which is the world’s leading derivatives marketplace and which knows a thing or two about futures products, agrees. Yet proponents of perpetual futures portray them differently. Kalshi describes perpetual futures as “the purest form of trading” and as products that are “very simple, very clean, and very accessible.” Indeed, it says that traditional futures “introduce additional complexity” because they are pegged to a specific date, whereas a perpetual “simply tracks whether or not the price of an asset goes up or down.” This is a complete misrepresentation of the nature of perpetual futures.

Traditional futures products are used to hedge…