Key facts
- Perpetual futures, previously dominant in crypto, are now being considered for gold, equities, and FX markets.
- A bank has reportedly evaluated a basis trade involving gold perpetual futures.
- US regulators granted approval for trading perpetual futures in the summer.
- Institutional investors are monitoring this development but have not yet engaged in significant buying.
Perpetual futures, a type of expiry-less contract that has been a mainstay in offshore crypto markets for years, are now being explored for traditional financial assets. These contracts are reportedly being considered for gold, equities, and foreign exchange markets, attracting the attention of institutional investors. US regulators approved the trading of perpetual futures this past summer. One bank is said to have analyzed the potential of a gold spot versus futures basis trade using these perpetual contracts, weighing factors such as initial margin, carry costs, and various fees against the bid/offer spread on each roll. While institutions are observing this trend, they have not yet begun to actively buy into these instruments.