TradFi perpetuals and stock tokens: A detailed guide

1. What are TradFi perpetual futures?

TradFi perpetuals are similar to standard crypto perpetual futures, but they track the price of traditional financial (TradFi) assets. Settled in USDT, these futures allow you to trade price movements without owning the underlying assets. Margin requirements and settlement mechanisms follow the same structure as regular crypto perpetuals. TradFi perpetuals cover a range of underlying assets, including precious metals, equities, and commodities.

Highlights:

• 24/7 market access: Access traditional markets anytime, free from standard market hours.
• Familiar experience: Trade with USDT settlement and no expiry dates for maximum flexibility.
• Hedging and diversification: Add traditional assets to your portfolio to diversify exposure and hedge existing positions.
• Leverage for greater potential: Amplify your trading opportunities with leverage.

2. What are stock tokens?

Stock tokens are digital assets built on blockchain technology that track the price of real-world stocks. Simply put, they are digital tokens designed to mirror the price movements of actual stock markets.

2.1 Key features of stock tokens

• Price pegging: Stock token prices stay synchronized with their corresponding U.S. stock benchmarks.
• 24/7 trading access: Unlike traditional stock markets, stock tokens can generally be traded around the clock in the crypto market.
• No shareholder rights: Holding stock tokens does not grant ownership of the underlying stock. This means no voting rights, dividends, or other shareholder rights.
• Fractional access: You can trade fractions of a stock, lowering the barrier to entry and making investing more accessible.

2.2 How trading sessions affect stock tokens

As stock token prices are designed to track underlying stocks, market liquidity and volatility may vary across different trading sessions.

1. During regular market hours

(9:30 AM – 4:00 PM ET)

Stable pricing and high liquidity: With highly active trading and rapid price updates, bid-ask spreads are narrow. This helps keep prices closely aligned and relatively stable.

2. Pre-market and after-hours trading

(4:30 AM – 9:30 AM ET; 4:00 PM – 8:00 PM ET)

Increased volatility and lower liquidity: As trading volume declines, the market may experience sharper price swings and reduced order depth.

3. Market closures

(Weekends and public holidays)

Stock tokens may still be tradable, but without active price discovery from the underlying stock market, price movements can become more volatile. In the event of major global macro news, stock token prices may swing sharply as the market prices in new expectations.

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