Consumer advocacy group Better Markets warned that CFTC-approved stock perpetual futures carry approximately 6-to-1 leverage, meaning a 16% market movement could wipe out an investor's entire portfolio. The organization made the claims in a court brief challenging the products' regulatory framework.
Former SEC acting chair Allison Herren Lee joined the legal filing, adding weight to arguments that the leveraged instruments pose significant risks to retail investors. The brief contends that the current approval structure fails to adequately protect consumers from potential total loss scenarios.
Better Markets Warns Stock Perps Could Zero Out Portfolios on 16% Market Move
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