WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with the filing of Better Markets’ comment letter with the Commodity Futures Trading Commission (CFTC) regarding the CFTC’s request for comment on 24/7 derivatives trading and perpetual futures: 

“The problem with both 24/7 futures trading and so-called perpetual futures on commodities such as oil is that they will harm retail customers. The ability to trade futures 24/7 may increase retail participation in the derivatives market, but that participation may cost retail customers money. That is because all they will be doing is essentially betting on price swings, and they will be doing so against sophisticated market participants.   

“Perpetual futures on physical commodities pose similar risks for retail customers. The use of leverage inherent in perpetual futures promises customers the opportunity to get rich quick. The reality is that retail customers may not realize that leverage also means that a very small shift in the price of the underlying assets can very quickly lead to very large losses.  

“The CFTC’s interest in 24/7 futures trading and perpetual futures on physical commodities signals its intent to continue blurring the line between investing and gambling.  Neither a move to 24/7 futures trading nor the advent of perpetual oil futures will improve price discovery or the ability to hedge risk; instead, they will both fuel purely speculative trading. The CFTC should not take actions that will threaten to turn derivatives markets into casinos.”  

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.