Gate ETF Product User Guide: A Comprehensive Analysis from Fractional Shares to Leveraged Trading

Odd-lot trading lowers the minimum threshold to a handling fee of 1 RMB, while leveraged ETFs offer the opportunity to gain 3x long/short returns without requiring margin.

These products, through innovative trading mechanisms, have opened up new ways for investors with different risk preferences and capital sizes to participate in the crypto market.

01 Product Overview: Gate’s ETF Product Matrix

Gate’s ETF products mainly fall into two categories: ETF odd-lot trading and leveraged ETFs.

These two products provide diverse investment choices for investors with different needs. Odd-lot trading is mainly aimed at users with limited funds who wish to make small, long-term investments. Leveraged ETFs are more suitable for investors who have a clear view of market trends and want to amplify returns in unilateral markets.

From a time perspective, Gate’s ETF services have developed from basic to professional. In 2020, the platform launched leveraged ETFs and has continuously optimized product rules, even covering approximately $500,000 in rebuilding losses to protect user interests.

02 Odd-lot Trading: An Innovative Solution for Small Investments

ETF odd-lot trading is an innovative service that allows investors to purchase less than 1,000 units of ETF shares. This mechanism significantly lowers the investment threshold for the crypto market.

Gate has set two trading sessions for odd-lot trading: intraday trading time is 09:00 - 13:30, only electronic orders are allowed; after-hours trading is 13:40 - 14:30, with no restrictions on order type. Both sessions use limit ROD order types.

In terms of cost structure, the handling fee for odd-lot trading is calculated as: share price × number of shares × 0.1425% × fee discount. More importantly, Gate has lowered the minimum handling fee from 20 RMB to 1 RMB, greatly encouraging small investments.

Compared to traditional round-lot trading, odd-lot trading has features in terms of price differences and transaction efficiency. Since odd-lot and round-lot matching mechanisms operate separately, transaction prices may differ. Also, odd-lot trades usually have smaller volumes, so transactions may take longer to complete.

In addition to directly purchasing ETF odd-lots, investors can also consider participating in ETF investments indirectly through contracts for difference (CFD). CFDs not only support smaller capital allocations but also allow investors to go both long and short.

03 Leveraged ETF: A Professional Tool for Amplifying Returns

Leveraged ETFs are a type of trading derivative launched by Gate, suitable for short-term holding in unilateral markets. Compared with traditional leveraged trading tools, leveraged ETFs offer a lower entry threshold, require no margin, and cannot be liquidated.

The naming rules of leveraged ETFs are straightforward, comprising the token, multiplier, and direction. For example, BTC3L is a Bitcoin 3x long token (L stands for long); BTC3S is a Bitcoin 3x short token (S stands for short).

In terms of fee structure, Gate’s leveraged ETFs only require a 0.1% daily management fee. This 0.1% daily management fee covers all costs, including contract market fees, funding rates, and open position spread losses.

The core mechanism of leveraged ETFs is the rebalancing system. This mechanism enables the product to track the multiple returns of the underlying asset while avoiding liquidation risk. Specifically, the system dynamically adjusts positions so that leveraged ETF products maintain a fixed leverage ratio over a certain period.

The rebalancing mechanism works as follows: positions are automatically increased when profitable and reduced when incurring losses. For long leveraged ETFs, when the market rises, the underlying asset value increases and the leveraged token becomes an automatic compounding system; when the market falls, it acts as a phased stop-loss system.

04 Practical Strategies: Application Scenarios for Different Products

Odd-lot trading mainly serves long-term, accumulation-oriented investors. Investors who purchase ETF odd-lots also enjoy dividend rights—the more ETF shares held, the higher the dividend received. This feature makes ETF odd-lots an effective tool for long-term wealth accumulation.

In contrast, leveraged ETFs are more suitable for short-term, unilateral market investments. In a continuously rising market, leveraged ETFs show a clear advantage. For example, when Bitcoin rises for two consecutive days, leveraged ETFs outperform simply buying BTC perpetual contracts with 3x leverage.

However, in choppy markets, leveraged ETFs experience value erosion. For example, in a scenario where Bitcoin’s price rises and then falls back to its original point, leveraged ETFs will not return to their original price, and investors will incur losses. Therefore, holding leveraged ETFs for the long term is risky and not suitable for medium- or long-term investment.

For professional users, leveraged ETFs can serve as effective hedging tools. By simultaneously holding leveraged ETFs of different directions or tokens, investors can construct complex hedging strategies to reduce the overall risk of their investment portfolios.

05 Risk Control and Points to Note

When trading ETF odd-lots, investors should pay attention to transaction efficiency. Since odd-lot trade volumes are usually small, transactions may take longer to complete. It is recommended that each order be large enough so that the handling fee exceeds the platform’s minimum fee, thereby improving transaction efficiency.

The main risk of leveraged ETFs is value erosion in volatile markets. In extreme, repeatedly fluctuating markets with 1,000-point swings, when the coin price returns to its original value after rising and falling, spot and non-liquidated contracts suffer no loss, but leveraged ETFs will incur significant losses.

All leveraged ETF products have strict and complete operating rules, and investors should carefully understand them before participating. At the same time, the Gate platform will continue to optimize products and plans to launch portfolio ETFs and low-leverage inverse ETFs to reduce costs through technical optimization.

Notably, Gate has shown a responsible attitude toward users during extreme market conditions. Previously, during violent market movements, most ETF product target currencies experienced instant drops of over 40%, and the actual hedging positions in contracts were liquidated. To prevent users’ 3L assets from being wiped out, Gate covered approximately $500,000 in rebuilding losses.

Future Outlook

For investors with limited funds, ETF odd-lot trading lowers the fee threshold to 1 RMB, making crypto investment truly “fragmented.” For trend followers, leveraged ETFs provide a 3x long/short tool with no margin required and never subject to liquidation.

The automatic rebalancing mechanisms behind these products allow for intelligent management—adding to positions during profits and reducing them during losses in unilateral markets. When the market moves continuously in the expected direction, these tools can amplify returns; but in choppy markets, investors need to be more cautious to avoid unnecessary value erosion.