Comment Text:
Dear Commissioners,
Thank you for the opportunity to comment on the use and regulation of perpetual derivatives. I am writing to express strong concerns regarding perpetual swaps and their potential to facilitate market manipulation.
Perpetual swaps differ fundamentally from traditional futures contracts in that they are not tied to a specific underlying asset or expiration date. This design enables traders to maintain positions indefinitely, without the discipline or convergence provided by contract settlement. As a result, prices can become decoupled from real supply and demand dynamics.
This structure creates an ideal environment for manipulation. Without the constraints of delivery or expiry, market participants can use perpetual swaps to exert continuous, outsized influence on asset prices. This is particularly concerning in equity-linked products, where such influence can distort stock price movements and mislead retail investors who depend on fair and transparent markets.
The absence of time-based value decay or delivery obligations removes key safeguards that promote price discovery and limit abuse in traditional derivatives markets. The continued growth of these products without adequate oversight risks undermining market integrity and investor confidence.
For these reasons, I respectfully urge the Commission to evaluate the role of perpetual swaps in enabling manipulative practices and consider their prohibition to preserve fair, orderly, and transparent markets.
Sincerely,
Retail Investor from USA
