What Are Stock Tokens?
Stock tokens (Stocks) are digital assets built on blockchain technology and pegged to real stock prices. Simply put, stock tokens are digital tokens that track the price of real stocks.
Key Features of Stock Tokens
Stock tokens generally have the following characteristics:
- Pegged to Real Stock Prices
The price of a stock token typically mirrors the price of its underlying U.S. stock.
- 24/7 Trading Availability
Unlike traditional stocks, stock tokens can be traded around the clock on crypto asset markets, unaffected by U.S. stock market opening and closing hours.
- Not Actual Stocks, No Shareholder Rights
Owning a stock token does not mean you own the actual stock, so you do not have voting rights, dividend rights, or other shareholder privileges.
- Fractional Ownership
Investors can purchase a fraction of a stock token, eliminating the need to buy whole shares and lowering the investment threshold.
Stock Token Behavior During Different Market Sessions
Since stock tokens are designed to track the price of their underlying stocks, the various U.S. market sessions can impact the price volatility and liquidity of these tokens.
- U.S. Regular Trading Hours (09:30–16:00 ET)
Low volatility, high liquidity: U.S. stock trading is active during these hours, resulting in fast price updates and tight bid-ask spreads. This keeps stock token prices closely aligned with the actual stock, minimizing volatility.
- U.S. Pre-Market & After-Hours (04:30–09:30 & 04:00–20:00 ET)
Higher volatility, lower liquidity: With reduced trading volume, there may be rapid price jumps and fewer buy/sell orders. This can lead to increased volatility and decreased liquidity for stock tokens.
- U.S. Market Closed (Weekends or Holidays)
Lower liquidity, potentially higher volatility: Stock tokens can still be traded, but without real stock price references, significant price swings may occur. If major global news breaks, stock token prices might react in advance to anticipated market trends.
