Webull Financial has added trading in futures and commodities to its investment products, making it possible for investors to hedge bets against assets they do not own. The move comes as the online brokerage gets ready for its initial public offering (IPO).
Reportedly, only US investors can access the new features at present, but the company indicated plans to roll out its futures and commodities options across its global customer base. A Bloomberg report quoted Webull’s chief strategy officer and head of derivatives, Arianne Adams, who said:
Understanding the significance of using futures is beneficial to all investors looking to diversify their portfolios.
Analysts explained that when staking a bet on futures, brokerage users invest against a predicted, upcoming value and not the current value of the commodity. Unique exchanges, such as the CME Group Inc. (CME), run these types of investments, and investors can only access it through a brokerage approved for futures and commodities trading.
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As a hedging option, futures and commodities protect investors against market volatility or sudden changes in a commodity’s price. Webull entered the brokerage arena as an equity trading platform and evolved to include options as it grew. According to Bloomberg, it is one of the top 10 brokers in the US.
The financial platform plans to go public through a merger with blank cheque company SK Growth Opportunities Corp, with a combined value of roughly $7.3bn. To date, Webull has 20 million registered users across 15 regions worldwide.
