- Financial institutions can now offer retail clients long and short leveraged exposure to Bitcoin and Ethereum as underlying markets
- Provides retail investors with tools to better control the risk of a volatile asset
- On-venue trading offers enhanced regulatory protection for investors
Spectrum Markets, the pan-European trading venue for securitised derivatives, announced today its product offering has widened to include cryptocurrencies as an underlying, with turbo warrants on Bitcoin and Ethereum now available.
The new products expand Spectrum’s existing suite of Turbo24s and allow brokers to offer their clients long or short leveraged exposure to the price of the two most popular cryptocurrencies.
This marks the first time financial institutions can offer European retail investor clients the opportunity to trade turbo warrants on cryptocurrencies, on-venue, 24 hours a day, five days a week.
Being able to trade overnight is particularly relevant for retail investors looking at this asset class because it allows them to reduce the gap risk presented by the 24-hour nature of cryptocurrencies, while trading on a regulated venue offers greater transparency and investor protection compared to many alternatives.
Using derivatives to access cryptocurrencies also means investors don’t need to maintain a separate crypto wallet, and enjoy greater assurances over the safer custody of their assets.
“We are proud to continue our track record of innovating to provide a better way for Europe’s retail investors, and this launch responds to very strong demand for versatile exposure to cryptocurrencies,” said Nicky Maan, CEO of Spectrum Markets.
“As well as being an easy way to access cryptocurrencies via their broker with a limited outlay, the Turbo24 products provide investors with tools to hedge exposure and better control their risk in what is, after all, a highly volatile asset class. We firmly believe there will continue to be a role for digital assets in retail investor portfolios, and we look forward to introducing further innovations and opportunities in this space,” he adds.
The knock-out function inherent to turbo warrants, through which the instrument is automatically terminated when the underlying asset hits a specific price, enables investors to effectively limit their exposure, while Spectrum’s 24-hour trading reduces gap risk, where investors lose out if asset prices change significantly while other venues are closed.
The ability to take short positions also enables investors to benefit from declining prices, and provides a valuable means of hedging long exposure as part of a wider trading strategy.