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JPMorgan sees limited institutional demand for perpetual futures
Key takeaways
- Based on conversations with clients and market participants, the bank said institutional interest in perpetuals has been muted.
- Morgan suggests that there is no/limited institutional demand that our desks are seeing," the bank's analysts said in the Monday report
- "The consensus opinion seems to be that perps activity is more akin to speculative use cases by traders versus hedging by producers/consumers or those players with real exposure to the underlying," the analysts added.
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 analysts said in the Monday report
"The consensus opinion seems to be that perps activity is more akin to speculative use cases by traders versus hedging by producers/consumers or those players with real exposure to the underlying," the analysts added.
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