How perpetual contracts reference index prices, presenter says
Smith said perpetual futures reference an index price calculated from multiple spot exchanges and that exchanges use observation and smoothing windows to derive that index; market participants should understand how indices are constructed and when they're observed.
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Smith explained the index price is typically a benchmark derived from a number of spot markets and that exchanges apply smoothing and observation windows to produce an index that perpetual contracts reference. "Starting with the the index price, I think what we want to say there is that's effectively often a benchmark in the digital asset space that's awfully often used by referencing a number of spot markets," he said.
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