Key Takeaways
- The Hyperliquid Policy Center says 24/7 energy perpetuals could give US traders a way to hedge oil risk when traditional futures markets are closed.
- Its research found that during a major March oil shock, a $10 million position could have cut a $1.58 million weekend loss to roughly $62,000 using an onchain oil perpetual.
- The CFTC is weighing both round-the-clock futures trading and perpetual contracts tied to physical energy commodities, with its extended comment period ending Aug. 26.
The Hyperliquid Policy Center is making the case for 24/7 US energy perpetuals.
The center argued that the oil market’s violent weekend price gaps show why traditional trading hours can leave hedgers exposed when geopolitical shocks hit.
The policy group published new research as the Commodity Futures Trading Commission considers whether perpetual contracts should be allowed for physically delivered or storable commodities such as crude oil.
Hyperliquid Research Points to $1.5M Weekend Oil Risk
The CFTC opened its consultation in June and later extended the comment deadline to Aug. 26, saying it wanted more information on both 24/7 futures trading and perpetual energy products.
The strongest part of Hyperliquid Policy Center’s argument comes from the oil shock that followed the escalation of the Iran conflict in March.
Traditional benchmark oil futures were closed for part of the weekend while crude prices continued to reprice elsewhere.
HPC studied 19 observable weekends for on-chain oil perpetuals and found that their off-hours prices generally aligned with when benchmark markets reopened.
During the weekend of March 6, crude repriced by about 16% while the benchmark market remained closed.
HPC estimates that an unhedged $10 million exposure would have suffered roughly $1.58 million in losses from that move.
A hedger using the on-chain oil perpetual throughout the weekend could theoretically have reduced the loss to about $62,000 after costs.
The episode was not hypothetical market noise.
WTI posted a record weekly gain of nearly 36% by March 6 as conflict in the Middle East disrupted shipping through the Strait of Hormuz and raised fears of supply shortages.
Why Hyperliquid Wants 24/7 Energy Perpetuals
Unlike conventional futures, perpetual contracts have no expiration date. Traders use funding payments to keep their prices close to the underlying market, while trading can continue through nights and weekends.
HPC argues that this structure can improve hedging by eliminating the need for traders to repeatedly roll expiring contracts.
Its research also found that median off-hours oil perpetual trades were around $1,300, roughly 100 times smaller than median benchmark WTI trades, suggesting the products may serve smaller participants rather than simply pull volume away from existing futures markets.
The CFTC, however, has not embraced round-the-clock energy trading without reservations.
In July, the regulator stayed a CME filing that would have allowed 24/7 crude oil futures trading, saying it first needed to examine market integrity, operational, and legal risks.
That leaves the policy question open: whether continuous markets reduce weekend risk or simply introduce new risks related to liquidity, surveillance, and liquidation.
HPC’s answer is that the March oil shock shows the cost of keeping markets closed can itself be substantial.
The CFTC now has to decide whether that argument is strong enough to bring crypto-style perpetual market structure into one of the world’s most important commodity markets.
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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
