FTX is a cryptocurrency derivatives exchange built by traders, for traders. They strive to build a platform powerful enough for professional trading firms and intuitive enough for first-time users. FTX supports quarterly and perpetual futures for all major cryptocurrencies, leveraged tokens, and OTC.
FTX saw its debut last year mainly as a crypto-derivatives platform launched by Alameda Research. In less than two years, it became one of the most relevant exchanges simply due to innovation and speed of delivery. They have introduced unique products to the crypto-community such as leveraged tokens, the ability to bet on the US elections and many more. Now they are introducing stocks.
Stock trading refers to the buying and selling of shares in a particular company; if you own the stock, you own a piece of the company.
FTX has dubbed the new fractional stocks offering a “first of its kind”. The trading service will be available in collaboration with Digital Assets AG and CM-Equity AG.
According to Sam Bankman-Fried, CEO of FTX, the tokens that represent a specific stock will function much like a depositary receipt or ETF (exchange-traded fund), which will be listed on the exchange. Giving an example of tokenized Tesla stocks, Bankman-Fried explained:
“These tokens are backed by shares of Tesla stock custodied by CM-Equity. They can be redeemed with CM-Equity for the underlying shares if desired.”
Users of the Hong-Kong based exchange can now start trading high demand stocks like Facebook, Netflix, and Google, represented by tokens, against BTC, stablecoins, and some altcoins.
However, traders in the US and all other FTX restricted jurisdictions won’t have access to these fractional stock products.
According to the FTX CEO, crypto and equities trading is becoming more popular among investors who want opportunities that match their interests.
Through a partnership with the German financial firm CM Equity AG and the Swiss-based Digital Assets AG, FTX will be offering its users the ability to trade a dozen of stocks through its platform. The most popular ones to become available are: Tesla, Amazon, Apple, Netflix, Facebook and the SPDR S&P500 exchange-traded fund.
This trend points to a future dominated by digitized assets that offer traders the unlimited potential to express their beliefs about various markets. FTX now joins a host of other crypto-focused firms that offer stock trading support to investors.
On Oct. 26, 2020, FTX partnered with Hxro to launch yet another product tailored for retail cryptocurrency traders.
Dubbed TixWix, the new service offers users a simplified product that should attract more traders to participate in the options markets.
The TixWix product leverages FTX’s back end to support a simplified options trading interface that distils complex market data to make trading options a simpler ordeal.
FTX also recently launched a crude oil futures product and plans to soon launch tokens based on oil futures, according to Bankman-Fried.
To create more liquidity and open the product to the widest range of users, each token will represent a fraction of a share. Additionally, the stocks will be traded against Bitcoin and against stablecoins.