HSBC Warns Ripple Prime’s 24/7 Stock and Commodity Swaps Face Thin Markets

Ripple is giving institutional clients a way to trade swaps tied to more than 100 markets, including shares, commodities and currencies, around the clock through its brokerage Ripple Prime, formerly Hidden Road. A swap is a contract that pays out based on price movements, so a client can take a position without owning the underlying asset. Clients can post Ripple’s RLUSD stablecoin as collateral, while Ripple Prime manages their collateral and risk across positions. Trading firm Virtu is already using the service, according to Ripple’s Oct. 15 announcement.

HSBC Calls It Evolutionary, Not Revolutionary

Daragh Maher, head of digital assets research at HSBC, said in a Monday client note that the market is growing fast but remains small compared with the traditional markets it tracks. He said the stronger case for the product will come once there is enough depth for investors to express views and adjust risk while conventional markets are shut.

Weekend Liquidations Show the Risk

A fund trading millions of dollars still needs a counterparty at an acceptable price. On Saturday, nearly $52 million in leveraged chip stock positions were forcibly closed within 10 minutes as selling spread from Binance to Hyperliquid. The shares were not trading, leaving the contracts without fresh stock market prices to follow. Maher expects early activity to be concentrated among market makers, proprietary traders and hedge funds running basis trades, which try to profit from price gaps between related positions, rather than institutions seeking strategic hedges.