Interested in crypto arb/tokens?
Jewish and bored on this quiet Easter morning? This was a good listen! and host former Jane Street trader
My Q: What happens if you prefer physical delivery of shares at settlement?
Conversation
it's a bit paradoxical because you would think crypto is one of the easiest things to "physically deliver" globally at any time, but cash-settled is king and because of liquid 24/7 spot market can choose what you move the cash into
there are some deliverable shops out there tho
1
2
But if “tokenize” a company before it IPOs or ICOs, there’s a finite amount of shares. So wouldn’t the exchange have to subscribe to the IPO/ICO to guarantee reserves IN CASE the token holder decides they want physical delivery? Are they not the right counterparty?
1
for the tokenised stocks they partner with -- so on FTX its just database entries but you have to redeem through CM-Equity -- i dont know the details of how this was managed but by the time it's public they can swap out exposure for real shares for redemption
1
So the counter party is the exchange, which is backed by the broker/prop trading firm CM-Equity?
1
for the normal tokenized stocks, they can be phyiscally redeemed.
for the pre-IPO ones they either cash settle or turn into stock upon listing.
FTX doesn't itself take positions in them, it's users trading against other users.