Structural Shift in Leveraged Trading Products

28 days ago

Gunjan Banerjee

"So, I recently wrote about perpetual futures, which is this crypto product where you can take 10x, 20x, 50x leverage on cryptocurrencies, right? So you put down $100 and that lets you control say $1,000 or $2,000 or $3,000 worth of cryptocurrency. So if your trade goes right, if you're bullish at the right time, it works out great; if you get caught flatfooted, you could be on the hook for a lot of money. But that has become one of the most popular trades on the planet and just a wildly popular way to bet on Bitcoin. I think that crypto market is really key to keep an eye on because I think you might start to see those structural changes and the products that have cropped up in cryptocurrencies crop up in the stock market as well, since it's an easier way to make these leveraged bets on stocks."

The speaker discusses the rise of leveraged crypto products like perpetual futures, emphasizing how a small investment can control a much larger position. He warns of the potential heavy losses if trades go wrong and suggests that we might soon see similar leveraged trading products emerge in the stock market, marking a significant structural shift.

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