Physical banknotes and coin imitations of Bitcoin crypto currency. OZAN KOSE/AFP via Getty Images
According to a Bloomberg report, the Small Exchange will launch a crypto futures product.
The performance of Grayscale trusts as well as crypto-exposed companies will be tracked by the new futures contract.
The firm hopes that smaller contracts will bring retail investors to the futures markets.
According to a Bloomberg report, The Small Exchange is a futures exchange that focuses on retail and is supported by Wall Street giants. It launched a crypto futures product for low upfront cash commitments.
The new product is a futures option on the Small Cryptocurrency Index. This index tracks Grayscale's bitcoin trusts and ethereum trusts, as well as shares in crypto-exposed companies such as Square and MicroStrategy.
The Small Exchange's unique twist is the unusually small contract sizes. They are 100 times smaller than the current price of $30. Investors might only need to invest a few hundred dollars in margin to start a trade.
The firm hopes that smaller contracts will draw retail investors to the less well-known futures market. This is where the retail share has been below 5% for many years.
Frank Kaberna (chief content strategist at Small Exchange) stated that there has been a reluctance by the vast community active stock and derivatives traders, to take up crypto. He attributed this to existing products being too complicated or requiring a lot of upfront cash.
Kaberna stated that "[our] crypto futures are at one of the lowest notional sizes of any futures on the entire market."
Launched last year, the Small Exchange has received backing from several Wall Street luminaries, including Interactive Brokers, Citadel Securities, and Jump Capital.