In 2021, the world seemingly witnessed the “rebirth” of the retail community.
Following years of siloed existence — sometimes acting as exit liquidity for hedge funds — the retail community reemerged on the Wall Street scene showing true force. What transpires afterward is now a chapter in the stock market history books.
Grandiose price ascensions sent GameStop Corp. GME, AMC Entertainment Holdings Inc. AMC and other meme stocks to unprecedented heights, which led to some of Wall Street’s big boys being, for once, at the mercy of their smaller counterparts.
The financial markets have not forgotten this moment in history. Many of them, in fact, have begun to tailor their product lines in the service of retail traders. Cboe Global Markets Inc. CBOE, for example, released Nano Option Contracts in an attempt to create a more affordable route to trading popular exchange-traded funds and stock market indices.
Tradovate, a modern-day futures trading platform, could be taking this movement a step further. Leveraging Coinbase Global Inc.’s COIN unique product offerings, the platform reports it is releasing some of the most affordable future contracts on the cryptocurrency scene.
With Coinbase Nano Bitcoin Futures, traders can leverage the incredible volatility of the cryptocurrency market for as low as $0.05 a contract and reap all the benefits (and risks) associated with futures trading.
A Deep Dive Into Nano Bitcoin Futures
Nano Bitcoin Futures (NBFs) are a possibly more affordable way to trade Bitcoin BTC/USD.
At its peak, Bitcoin’s price transcended $69,000. For many retailers, purchasing just one Bitcoin was not a possibility. According to one report, the average account size of a retail trader on Robinhood Markets Inc. HOOD was $4,000.
With NBFs, many of the pitfalls of affordability are significantly lessened. For one, NBFs are priced at 1/100th of a Bitcoin. Even at the height of Bitcoin’s boom, an NBF would’ve cost around $690, a price far more affordable than the actual cryptocurrency. Affordability breeds not only accessibility but also leverage. With NBFs, future traders can put their capital to work and purchase lofty position sizes. Leverage maximizes the potential for gains, but also for losses, so it can be crucial for traders to understand the risks and have a clear strategy. While leverage can provide more buying power, it also increases risk.
In addition to a reduced price, Tradovate says it has further improved the affordability of NBFs by cutting commission, market data, subscription and inactivity fees. This affordability is paired with the benefits of futures trading, including:
- An ability to go short or long
- An ability to hedge existing positions or speculate on an upcoming movement
- Extended trading hours
- Cash-settled contracts
NBFs are monthly contracts that are listed for the two nearest months. With them, Tradovate says retail traders can, for once, leverage their capital like the pros and do so in a highly regulated and safe environment.
Click here to learn more about possibly optimizing Bitcoin trading with NBFs.
Trading virtual currency derivatives have a variety of unique and potentially significant risks. Please read our full Virtual Currency Transaction Disclosures & Risk Disclosure Statement for Virtual Currency Futures prior to any virtual currency trading.
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