Not the leverage provided by the contracts, the leverage used to buy the contracts.
It’s not normal trading IMO, because it is coordinated. That coordination is achieved not by a direct order, but by underwriting guarantees. The coordination never has to be total, it only has to be enough.
I am not opposed to this as a mechanism, btw, and this is not a paranoid conspiracy theory. This system probably serves the everyman, and the country as a whole, better than one in which much larger swings can, and have been, engineered by a select few for their exclusive benefit. Know who will benefit most from a huge crash? Those same banks and institutions, sifis, that now play along, having traded real risk for security (real risk because the big gambits don’t always work).
It works and will continue to work, with savers as collateral damage. Hugely mounting debt might be a problem, which is why T has his undies in a bundle over the Fed. As long as there is ZIRP or NIRP, debt isn’t a problem, and he knows it, which is why he is running up huge debt. By “normalizing”, the Fed is upsetting his, and everyone’s, apple carts.
PPT is just QE 2.0, only essentially invisible, with vastly more rapid response time and cost recovery, making it much more efficient. Also, because of that, it doesn’t appear on the books because credit is extinguished very quickly.
I do see the benefit of putting dampers and governors and flywheels on the market. Is the longest bull run in history evidence that the problems (especially debt) been conquered? Definitely maybe, the play is continuing.
Let’s hope for no pandemic and no infrastructural cataclysm—although even those might be dealt with.