Ripple has opened a Delta One trading desk within Ripple Prime, its prime brokerage division. This service allows institutional investors to bet on the price movements of US-listed stocks, major stock indexes, and crypto assets without having to own them directly.

This move takes Ripple into a business long dominated by Wall Street banks such as Goldman Sachs and JPMorgan. Although Ripple has its roots in the crypto asset world, there is no requirement to use XRP to access this new service.

Ripple’s Delta One Desk Enters a Bank-Dominated Market

Delta One may sound complicated, but the concept is actually simple. These trading desks offer products whose value movements track the underlying assets on a one-to-one basis. The primary tool used is the total return swap
T
TRS
. Thus, clients receive the full returns from stocks, indexes, or tokens without having to own them directly.

The transaction values on desks like this are enormous. In 2008 and 2011, rogue traders at Société Générale and UBS suffered billion-dollar losses in Delta One books. The scandal showed just how large the flow of money through this banking sector is.