The chief executive of the world’s largest futures exchange issued a broad rejection of the first U.S.-approved perpetual futures contracts on Thursday, warning that the products could expose retail traders to elevated leverage compared with CME-listed markets.
Terry Duffy, chairman and CEO of CME Group, said at the Piper Sandler Global Exchange & Fintech Conference that perpetual futures in some offshore markets trade with leverage ranging from 20x to as high as 250x, compared with CME’s roughly 5x framework on crypto products.
“I have grave concerns with the way these contracts are set up,” Duffy said at the conference. “I don’t like to see people that don’t understand products to potentially get blown out of a contract that they shouldn’t be in the first place.”
Duffy compared current market behavior to conditions ahead of the 2008 financial crisis. “I really believe it’s 2007,” he said. “The housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen.”
CFTC approval
