Annanay Kapila – Perpetual Futures Everywhere and All the Time (S7E24)

Bullish:

• $PERPS - Perpetual futures are the inevitable future of traditional markets, offering superior capital efficiency, 24/7 trading, and better leverage than traditional futures.

  • “I believe that perpetual futures applied to traditional markets like equities is the future and something he wanted to build.”

    Annanay·11:11

  • “the crypto style of exchange was able to offer all these cool things like they were twenty four seven. They were like very little operational work that had to be done. Capital efficiency was much higher so they could offer a lot more leverage.”

    Annanay·6:17

  • “this crypto style architecture is able to offer leverage efficiency. That's something institutions and retail both want.”

    Annanay·7:03
• $TWENTYFOURSEVEN - 24/7 markets are necessary and will become the standard as they improve capital efficiency and allow smooth liquidations during market stress.

  • “by having not even 20% but continuous markets, continuous price action, we're able to offer more capital efficiency because we're gonna liquidate you smoothly in times of market stress, even if that's over the weekend.”

    Annanay·24:51

  • “There's demand from Asia to trade those US markets as the world gets more globalized.”

    Annanay·27:21

  • “I think it's more about what people want and making sure that markets are there to price things when things do happen, things do change.”

    Annanay·27:41
• $ALTDATA - Alternative data and overnight trading volumes are growing rapidly as global demand for US market access increases.

  • “there's a wonderful ATS led by a great team called Blue Ocean. Their average daily volume is skyrocketing. A month ago, I talked to them and said it was 2 and a half billion dollars a day. I'm sure it's even more now.”

    Annanay·27:12

  • “Pretty much all traditional assets now trade twenty four five. Even US equities is very active overnight session now. That section is growing as a percentage of kind of total volume, and I imagine it will continue to grow as the world gets more globalized.”

    Annanay·28:46

Bearish:

• $CME - Incumbent exchanges like CME are resistant to innovation and locked into outdated market structures that prevent them from offering better products.

  • “exchanges historically are not great for change. They don't like to piss off the market makers who already make a lot of money there.”

    Annanay·8:50

  • “large incumbent exchanges like CME and ICE have pigeonholed themselves into the kind of old school US structure of markets”

    Annanay·9:43

  • “They don't wanna remove the other cogs. They don't wanna go into single gear mode. They wanna keep their moat for where it is. And this is the easiest way for it to do them. It's not through innovation now.”

    Annanay·10:22
• $TOKENIZATION - Tokenized equities have failed to gain traction and lack clear value proposition compared to perpetual futures.

  • “I think the tokenized equity thesis is a little bit dead.”

    Annanay·57:38

  • “I don't really see, especially in a in a world where we are moving to twenty four five trading with the underlying anyway, how tokenized equities have broad market fit.”

    Annanay·55:56

  • “I fear they're just kind of fragmenting traditional liquidity but without any real upside.”

    Annanay·56:52

  • “Why would you want to move them on chain? I have no idea.”

    Annanay·54:59
• $TRADFI - Traditional financial market structure is inefficient with unnecessary intermediation that limits leverage and capital efficiency.

  • “coming from a crypto world, that was insane to me because basically I saw the efficiencies that you could achieve if one company did all three of these functions.”

    Annanay·5:51

  • “I estimate certainly somewhere in the range of like 2 to $10,000,000,000 a year is lost by institutions who are basically holding a future position that they wanna hold for long with the expiry”

    Annanay·9:21

  • “that intermediation is causing the loss of capital efficiency.”

    Annanay·59:52