Ripple is bringing round-the-clock trading in stocks, gold and oil to institutional investors through its brokerage platform, Ripple Prime. However, HSBC cautions that shallow liquidity could limit adoption, particularly among institutions looking to execute large trades.

Daragh Maher, HSBC’s head of digital assets research, described the development as an incremental step rather than a major market breakthrough in a client note on Monday that was shared with CoinDesk.

Maher explained that while the market is expanding quickly, it remains relatively small compared with the traditional financial markets its contracts track. He said the platform’s appeal would increase once trading volumes and market depth allow investors to take positions and manage risk during periods when conventional exchanges are closed.

Ripple Prime, formerly known as Hidden Road, now provides access to swaps linked to more than 100 markets across equities, commodities and currencies. These financial contracts allow traders to gain exposure to price movements without buying the underlying assets. Ripple announced on Oct. 15 that trading firm Virtu was already using the service.

The contracts track perpetual futures offered by Trade.xyz through Hyperliquid, a cryptocurrency derivatives exchange. Because perpetual futures have no expiry date and trade continuously, investors can maintain positions in assets such as gold throughout weekends and other periods when traditional markets are inactive.

Ripple Prime oversees clients’ collateral and risk management across their positions. It also allows traders to use RLUSD, Ripple’s dollar-pegged stablecoin, as collateral. The brokerage connected to Hyperliquid earlier in February.

However, executing multimillion-dollar trades can be difficult when there are not enough counterparties available. Institutional investors need sufficient buyers and sellers to enter or exit positions without significantly affecting prices.

A recent incident demonstrated the potential risks. Nearly $52 million in leveraged chip-stock positions were liquidated within 10 minutes as selling pressure spread from Binance to Hyperliquid. With traditional stock markets closed, the contracts lacked updated share prices, leaving traders exposed to sudden market movements.

HSBC expects early participation to be dominated by market makers, proprietary trading desks and hedge funds using basis-trading strategies. These traders seek to profit from price differences between related assets or contracts rather than primarily using the products for long-term hedging.

Maher indicated that broader institutional participation would likely depend on whether the market develops enough depth to accommodate larger positions and support effective risk management.

HSBC also emphasized that Ripple must demonstrate advantages over established brokers and trading venues, including lower costs, easier execution and more efficient collateral usage.

Ripple is already collecting fees from financing leveraged stock trades, according to a CoinDesk report published earlier this month. The move places the company in a business traditionally dominated by banks.

The new swaps are currently available under Ripple Prime’s British Virgin Islands license, with expansion into additional jurisdictions planned. Ripple has named an early client but has not disclosed the total trading volume processed through the service.