Coinbase launches premarket trading of new tokens
Date: 2024-06-18 Author: Oliver Abernathy Categories: BUSINESS
Cryptocurrency exchange Coinbase announced the launch of premarket trading on the international platform and on Coinbase Advanced. This new trading format will allow traders to enter into perpetual futures contracts on tokens prior to their official listing, providing unique opportunities to participate in the pricing of new assets.
Features of premarket trading
Pre-market trading will be available to select institutional clients of Coinbase International and Coinbase Advanced users, excluding jurisdictions such as the UK, US and Canada. Traders will be able to open long and short positions with up to 2x leverage, which creates additional profit opportunities, but also increases risk.
“Our premarket markets will provide traders with the opportunity to participate in the pricing of project tokens before they launch, all within a robust and secure infrastructure,” Coinbase said in a release.
Once officially listed on the spot market, these contracts will be converted into standard perpetual futures. The nominal position limit for pre-markets will be $50,000, providing traders with significant flexibility in managing their investments.
Increased risks and volatility
Coinbase warns of increased risks associated with premarket trading. In such markets, the likelihood of automatic position liquidation is higher than in regular markets. The company uses a four-hour exponential moving average (EMA) to form the index price, which also affects the level of volatility.
“Traders should consider the possibility that some crypto assets will not complete the listing procedure. This is a risk factor that is beyond the control of the exchange,” Coinbase explained.
New products and innovations
Earlier, Coinbase introduced a new product - Smart Wallet, a service for creating non-custodial crypto wallets, which expands the ability of users to manage their digital assets.
The launch of pre-market trading on Coinbase International and Coinbase Advanced represents an important step in the exchange's development, offering traders new opportunities to participate in the cryptocurrency market. However, participants should be prepared for increased volatility and consider all associated risks.
