Stock Perps Will Become the Main Battleground for Small-Cap Stocks

While the U.S. stock market was closed for BNC, its perpetual contract on crypto exchanges saw trading volume 25 times that of the underlying stock, with a market cap of $100 million generating nearly $100 million in open interest. A deep dive into how stock perps are creating a second, around-the-clock capital market for small-cap stocks.

Author: danny

On the afternoon of September 8, 2026 (Asia time), Americans had just finished observing Labor Day, and the Nasdaq had not yet opened. The last official trade of CEA Industries' stock BNC was the previous Friday. But on the other side, on crypto exchanges like Binance, Bitget, and Bybit, BNC had been trading all weekend. PerpEquities recorded the BNC perp price at around $4.56, 35.5% higher than before the U.S. market closed. Over the past 24 hours, its network-wide perp trading volume was about $71.5 million, and according to exchange-reported data, it exceeded $200 million; during the same period, the reference BNC underlying stock trading volume was only about $2.8 million.

In other words, in this time window, BNC perp trading volume was about 25 times that of the underlying stock.

Open interest (OI) is also worth mentioning. At that time, BNC perpetual had accumulated open interest of about $88 million, equivalent to more than half of its circulating stock value. Binance alone did about $33.2 million in BNC perp volume in the past 24 hours (September 8). At one point, funding was pushed to extreme levels, with BNC funding on Binance hitting the +2% cap every eight hours.

This is not a large-cap stock. BNC's market cap at the time was just over $100 million. CEA itself disclosed in SEC filings that as of the end of April this year, the company held 515,544 BNB, with a fair value of about $317 million at the time. It has transformed from an environmental control equipment company into a BNB treasury company.

Thus, a picture rarely seen before in U.S. stocks emerged: a Nasdaq company with a market cap of just over $100 million, while the stock exchange was closed, had already built an around-the-clock derivatives market with nearly $100 million in OI outside. In this market, there were longs and shorts, leverage, liquidations, funding rates, and market makers, and none of this required CEA to issue a single additional share.

If you only see this as the crypto world launching another new contract, you will miss what is truly important. BNC's perp is not just adding a product to the stock; it is creating a second capital market for the company.

Small-cap stocks don't lack stories; they lack a casino

Apple doesn't need stock perps to solve liquidity problems. Neither does NVIDIA. They have spot, pre-market and after-hours, mature options, ETFs, securities lending, prime brokers, and institutional OTC markets. For these companies, stock perps can be lively, but more often they are just a peripheral tributary.

Small-cap stocks are not like this. A company may have a market cap of only $1 billion, $500 million, or even $100 million, yet it happens to hit a story like AI, drones, quantum computing, nuclear power, space, crypto treasury, or biotech. Social media buzzes every day, but when it comes to the actual market, there aren't many tools available. The stock order book isn't deep enough, and pre-market and after-hours are even thinner; options may exist, but far-month contracts lack depth, and many strikes have wide bid-ask spreads; if you want to short directly, you have to deal with locate, borrow availability, and borrow fees. When the company issues an announcement on Friday night, the U.S. stock exchange can only tell you: come back on Monday.

There is a huge mismatch here: information demand is 24/7, speculative demand is global, but traditional small-cap infrastructure is still built to the dimensions of the U.S. stock market.

Perpetual futures are well-suited to fill this gap. They don't require designing dozens of strikes, nor do they have monthly expiration issues. Exchanges only need to solve index, oracle, margin, funding, liquidation, and market making to build a unified long/short market for a company. Users use USDT or USDC as collateral, without needing a U.S. securities account first; to short, they don't need to locate shares themselves; seeing news in the evening in Asia, they don't have to wait for New York to open.

For Apple, this is just another tool. But for a small stock without mature options, lending, and a global institutional market-making system, it may directly fill in a layer of financial market that didn't exist before.

Not all small-cap stocks will become BNC

Of course, this doesn't mean any random stock can be listed as a stock perp. This requires a special product under specific conditions.

Ondas Holdings, or ONDS, is a good counterexample. It also has many elements crypto traders like: drones, automation, defense, critical infrastructure, a fresh enough story, and big enough stock price volatility. In the second quarter of 2026, the company's revenue rose from $6.27 million in the same period last year to $83.77 million, and first-half revenue rose from about $10.52 million to $133.9 million.

Crypto exchanges certainly didn't miss it. ONDS perp is already distributed across more than a dozen trading venues, including Binance, Bybit, Bitget, OKX, and others. But as of the afternoon of September 8, PerpEquities' statistics showed ONDS perp 24-hour trading volume was only about $2.14 million, with OI of about $2.89 million; during the same period, underlying stock trading volume was about $330 million. Perp/spot volume was only about 0.01 times, and OI as a percentage of circulating market cap was also very low.

The reason is not complicated. ONDS's traditional market is not as barren as BNC's. Its own stock trading is already active, and options also have scale. Crypto can replicate the ONDS ticker, but it hasn't solved a problem that the traditional market couldn't solve.

Applied Optoelectronics' AAOI is similar. It is a typical high-beta stock in the AI optical communications industry. In the second quarter of this year, revenue reached $191.9 million, compared to $103.0 million in the same period last year; 800G product shipments more than doubled quarter-over-quarter, and demand is expected to exceed capacity until mid-2027. AI, data centers, optical modules, high growth, high volatility—it has almost all the elements crypto traders like.

So Bitget, OKX, Binance, and Bybit quickly listed AAOI perp. Now AAOI perp is distributed across more than twenty crypto venues. But on September 8, AAOI perp's 24-hour trading volume was about $42.7 million, with OI of about $28.7 million, while underlying stock trading volume reached about $736 million during the same period. Perp/spot was only about 0.06 times.

Why? Still because traditional finance hasn't been absent. AAOI itself has active spot and options markets, with tens of thousands of option open interest in a single expiration month. For this kind of stock, crypto is not filling a hole; it is setting up another table next to a mature market.

This draws a boundary for the future of stock perps: the more traditional finance neglects building derivatives infrastructure for a stock, the greater the value of perps; for stocks where traditional finance has already laid out options, borrow, ETFs, and market-making networks, perps can only rely on 24/7 trading, stablecoin collateral, and the crypto user base to grab peripheral trading volume.

FWDI is where the two worlds truly begin to connect

Forward Industries' FWDI is even more interesting because its balance sheet itself is doing DeFi.

Forward was once a small hardware company, and later turned itself into a Solana treasury company. As of August 3, 2026, the company held about 7.807 million SOL and SOL equivalents, roughly equivalent to 1.3% of Solana's circulating supply. It doesn't just buy coins and hold them; the company runs its own validator, and also partnered with Sanctum to develop a liquid staking token—fwdSOL—and explicitly plans to stake SOL, deploy assets into DeFi protocols to earn yield, lend out SOL, use SOL as collateral to borrow money, and then invest in the Solana ecosystem.

By the end of June this year, the company already had more than 3 million SOL or fwdSOL pledged to Galaxy, with a loan balance exceeding $100 million, plus on-chain debt. The company has also done SOL lending and OTC options. In other words, it is not a "listed company that bought crypto," but rather a listed company that is putting treasury, staking, lending, collateral, and derivatives into the same balance sheet.

So it is almost natural that FWDI has a stock perp. Binance listed BNCUSDT and FWDIUSDT simultaneously on July 9. Now FWDI perp's OI is about $60 million, equivalent to more than ten percent of its circulating stock value. Its perp trading volume has not yet exceeded the underlying stock, but peripheral derivative exposure has reached a level that cannot be ignored.

Comparing BNC, FWDI, ONDS, and AAOI together makes this story interesting.

AAOI is where the traditional stock market still absolutely dominates; ONDS has a story, but TradFi is already active enough; FWDI is where peripheral derivative exposure has accumulated into a position pool that cannot be ignored; BNC is where, in certain time windows, perp trading volume, OI, and price discovery have become more like the main market than the underlying stock.

What truly determines whether perps have a chance is not whether the company is small, but how large the gap is between speculative demand and traditional financial supply.

What perps really create is additional risk capacity

Stock float is limited. A company has only as many shares as its circulating shares. To increase the number of shares, the company needs to issue more; to short a stock, someone generally needs to be willing to lend it to you.

Perps are not constrained by this "physical (equity) quantity." Suppose a company has only $200 million in circulating market cap; the perpetual market can easily generate $50 million, $100 million, or even hundreds of millions of dollars in open interest. As long as longs and shorts are willing to enter, and the liquidation system is willing to take on these positions, new economic exposure can continue to increase.

Here we cannot simply say "OI is synthetic shares," because every perp has both a long and a short, and whether market makers ultimately hedge in the stock market, and how much they hedge, depends on the specific market structure. But perps do create one thing: additional risk capacity.

A company with only $100 million in stock float can have a derivatives position pool of $50 million or even over $100 million. Market participants don't need to fight over that small amount of physical stock, nor do they need to wait for the company to issue more shares, to continue expressing their views.

So in the future, when researching this type of stock, short interest / float is no longer enough. Research institutions also need to add one more indicator: Perp OI / Equity Float.

BNC exceeds 50%, FWDI is in the teens, and AAOI and ONDS are both below 1%. Putting these numbers together already gives a rough idea of which stocks' peripheral markets have truly grown.

Why OI is money, and why funding is a weapon

OI itself is not revenue. BNC having $88 million in OI does not mean Binance collected $88 million. But OI is inventory that can be continuously monetized.

After a stock investor buys $1 million worth of stock and holds it for a year without moving, the exchange only collects fees once at the time of the trade. Perp positions are not like this. People constantly add, reduce, close, and get liquidated; some switch directions because funding is too expensive; market makers also have to hedge repeatedly. As long as OI remains in the market, fees and spreads will continue to be generated.

So for exchanges, market deployers, and market makers, OI is very close to the stock of future trading activity. Hyperliquid's HIP-3 has already productized this further: market deployers can create their own perpetual markets and receive fee shares from trading activity. In the past, exchanges operated "securities markets"; now protocols are starting to let third parties operate "the market for a specific ticker."

Funding is another layer. The most interesting part of BNC this time is that longs were once too crowded, and Binance funding ran to +2% every eight hours. Traditional stocks tell you "how much this company is worth"; perps add another question: "How much does it cost to hold this view right now?"

This is where funding becomes a weapon—in other words, the reason it becomes the next-generation financial battleground. A short trader may not think BNC should crash; he may simply think that longs are willing to pay such high funding, so it's worth standing on the other side. A vault can also build a market-neutral strategy around spot, tokenized stock, perp, and funding.

The stock market previously had dividend yield, borrow fee, and option premium. Now there is also funding yield.

Let the game become even more intense!

Once a stock enters the chain, it no longer has only one form

This is also the biggest difference between stock perps and traditional CFDs. CFDs can also go long, short, and add leverage, but in the end they are still just a contract in a broker's database. Crypto things will continue to connect outward.

Tokenized stocks can go into wallets, be used as collateral, enter lending markets, be used as LP, and then be hedged with perps. xStocks now covers hundreds of tokenized stocks and ETFs and has entered multiple DeFi scenarios. Protocols like Kamino have also built lending markets around tokenized stocks.

At this point, the financial structure of a ticker begins to change. There are stocks on Nasdaq, options in traditional markets, perps on Binance, OKX, and Bybit, and tokenized stocks on-chain. A market maker can hold tokenized stock and short perps; users can use tokenized stock as collateral, borrow stablecoins, and then continue to increase exposure; protocols can build vaults around funding.

And then there are memes. What crypto is best at is not just inventing assets, but turning attention itself into a layer of liquidity. Once a company simultaneously has a ticker, a story, a community, a perp, a tokenized asset, and on-chain liquidity, it is not hard to imagine memes, prediction markets, points, and various vaults emerging around it.

A company that once had only a stock ticker has, with the wings of crypto, learned its own seventy-two transformations.

FWDI is already telling you that the company itself may join this Lego

Forward Industries is worth continuing to watch because it didn't wait for others to do DeFi for it.

It issued fwdSOL itself, runs its own validator, stakes itself, uses its assets as collateral itself, borrows itself, writes SOL options itself, and even uses borrowed funds to buy back stock. When the company explains these operations, it looks not only at traditional EPS, but at SOL per share.

This creates a new closed loop. Stock price affects financing capacity; financing is used to increase crypto treasury; treasury is staked to generate yield; LST can continue to be collateralized; collateral generates new financing; the company uses financing to buy back stock, reducing share count; the market recalculates per-share crypto asset exposure; meanwhile, outside there are FWDI perpetual futures, allowing more people who don't own the stock to trade this cycle.

This is no longer simply "a listed company buying crypto," but closer to a listed company beginning to use the balance sheet language of DeFi.

So the companies most suitable for stock perps in the future are likely not random small-cap stocks, but those whose business models are already tightly connected to on-chain assets. Crypto treasury stocks are the first batch, and later there may be AI compute, DePIN, RWA, and even some energy companies.

Without issuing a single additional share, a ticker can be repeatedly monetized

This leads to an important change: perps can allow the market to create massive economic exposure around a company without the company issuing a single additional share.

Traditional listed companies that want to use market enthusiasm to raise funds mostly rely on ATM, secondary offerings, convertibles, or warrants, and ultimately cannot avoid share supply. Perps separate speculation from issuance. A company with only $200 million in float can easily have $200 million, $500 million, or even larger derivative gross exposure outside. This market can turn over many times a day, generating fees, funding, spreads, and liquidation activity, without the company's transfer agent moving at all.

So the statement "harvest without dilution" is half right, but who harvests needs to be clarified. If the company has no relationship with the perp at all, then no matter how much trading happens outside, the company itself will not automatically receive money. The ones making money are exchanges, market makers, deployers, arbitrageurs, LPs, and funding receivers.

What is truly worth imagining is the next step. If issuers, tokenization providers, market deployers, oracle providers, and DeFi protocols begin to establish commercial relationships, then the ticker itself may become an asset that can be continuously licensed, distributed, and operated. At that point, listed companies earning money from attention will not necessarily have to rely on issuing new shares every time.

This is the real impact of "no dilution."

The biggest regulatory vacuum is not the absence of law, but products running between legal classifications

We cannot say stock perps are unregulated. The U.S. has long had rules such as security-based swaps for single-stock derivatives, and there are high barriers for ordinary retail investors.

The real problem is that when perpetuals, offshore exchanges, tokenized stocks, stablecoin collateral, and DeFi lending are stacked together, traditional classifications become difficult to apply. In the past, regulators were accustomed to asking: Is this a security, a future, or a swap? Crypto products now may simultaneously be a tokenized stock collateral, a perpetual hedge, a stablecoin margin account, plus a DeFi lending position.

In 2026, the SEC and CFTC also began to re-discuss the boundaries between swaps, security-based swaps, and perpetual contracts. This shows that regulation is not a blank slate, but rather chasing products.

So at this stage, a more accurate statement is not "there are no rules," but that there is arbitrage between jurisdiction, product classification, and distribution channels. For the same BNC, U.S. retail investors buying through securities accounts are buying Nasdaq shares; crypto users outside the U.S. may be trading BNCUSDT perpetuals. The company has not issued additional shares, yet the legal relationships on the two sides are completely different.

Even more noteworthy is that the company itself does not even have to actively "issue" this perpetual like a Nasdaq listing. Trading venues can build new markets around its ticker, and the company itself may not be a party to the contract.

This is a major change in traditional corporate finance.

Tax avoidance?! But more precisely, it's a different tax path

On taxes, we also cannot simply write that perps are tax-free. More precisely, cash-settled derivatives can avoid some transaction taxes arising from stock ownership transfers in certain jurisdictions.

The UK is a clear example. The establishment and closing of CFDs do not involve buying or selling stocks, so they generally do not incur Stamp Duty or Stamp Duty Reserve Tax. Certain cash-settled futures have similar treatment.

But this does not mean profits are not taxed. The U.S. also has rules such as Section 871(m) targeting equity derivatives, and different countries treat derivative gains, crypto settlement, and stablecoins differently.

So what perps really change is the entry point of taxation. Traditional stocks tie together trading, custody, ownership, settlement, dividends, and taxes; stock perps remove ownership, leaving a cash-settled price contract. Some stock transfer-related taxes and operational frictions will decrease, but funds will enter another set of derivative taxation.

As for how tax authorities will ultimately set it up? Let's wait and see. 
 

What kind of small-cap stocks are most likely to be "counter-killed" by perps?

Putting BNC, FWDI, ONDS, and AAOI together for comparison, the first intuition is: this has nothing to do with market cap.

For perps, the truly interesting stocks are those with huge attention but very small traditional financial capacity. They need a story, because without a story there is no global speculative demand; the float should preferably be small, because the peripheral derivative capacity will more easily appear huge; options and borrow should preferably be immature, because the worse the traditional derivatives, the higher the substitution value of perps; and it is best to have a large number of Asian or crypto-native users, because that makes 24/7 trading not just a gimmick. If it also has a tokenized wrapper, related crypto assets, or on-chain hedgeable assets, it is even easier to form a closed loop.

BNC almost fills all these conditions. FWDI also fills many. ONDS has a strong story, but its own spot and options are already hot enough, so perps can't grab much. AAOI, although also a high-beta AI stock under $10 billion and listed on more than twenty crypto venues, already has a mature casino in Nasdaq spot and options, so crypto can only sit next to it and set up a table for now.

So what we should really look for is not small companies, but companies whose stories are much bigger than their market infrastructure. For example, AMC, HIMS, GME, and others on Robinhood's chain.

The next thing truly worth watching is who sets the price for Monday's open over the weekend

BNC's Labor Day weekend has another significance. While the U.S. stock market was closed, perps did not rest. If company news, BNB volatility, or the entire crypto market changed, BNC perp could trade first. By the time Nasdaq opened on Tuesday, the stock was no longer facing "last Friday's closing price," but a new set of prices accumulated over dozens of hours outside.

When perps are very small, this doesn't matter. But if perp OI is already equivalent to a large portion of the float, and 24-hour trading volume can be several times or even dozens of times that of the underlying stock, then weekend perps at least have enough capital to form a price that can be taken seriously.

Thus the relationship between underlying and derivative begins to loosen.

Legally, BNC stock is of course still the underlying. But on weekends, the underlying is silent, and only the derivative is speaking. When Nasdaq reopens, the stock may instead have to answer the questions that perps raised over the past two days.

This is where stock perps are most likely to change the market structure of small-cap stocks. They don't necessarily need to take away most of the annual trading volume, nor do they need to replace Nasdaq. As long as they can become the market that remains open when stocks most lack liquidity, trading venues, and price discovery, they begin to have price discovery capability.

The biggest risk is also here

Small-cap stocks are already thin. If peripheral perpetual OI reaches the same order of magnitude as the stock float, and the U.S. stock market is closed, it becomes very troublesome for the oracle to decide whom to trust.

The stock has no fresh price, but the perp must continue to calculate index and mark. The order book moves first, and the mark follows; the mark triggers liquidation, and liquidation continues to hit the order book. If market price, oracle, mark, and liquidation are not well designed, a self-reinforcing cycle may form.

If the same stock has more than a dozen stock perps simultaneously, the problem becomes even more complex. Platform A references B, B references C, and in the end the so-called "external price" may have a significant portion coming from other derivative venues.

This is also why Binance, Bitget, OKX, and Bybit spend a lot of effort designing Impact Price, EWMA, Index band, staleness filter, and mark-price protection. (Related reading: After Nasdaq Closes, Who Quotes: Stock Perps, Oracles, and a 24/7 Stock Pricing War)

For trillion-dollar mega-caps like Apple, this is a safety belt. For BNC, it may be a real market rule.

So in the future, the truly difficult part of regulating stock perps may not be "what is the maximum allowed leverage." The real difficulty is: when the U.S. stock exchange is closed, who is qualified to continue producing prices for a listed company?

Stocks are replicating the path crypto walked ten years ago

Crypto was also very simple ten years ago. A project had only one token. Later there were spot exchanges, and then margin, perpetuals, lending, stablecoin collateral, LP, vaults, structured products, and prediction markets. Eventually, an entire financial system grew around a single token.

Stocks are now walking this path in reverse.

Stocks are responsible for legal ownership, tokenized stocks for on-chain settlement, perps for leverage and 24/7 price discovery, stablecoins for collateral, DeFi for capital efficiency, options continue to be responsible for volatility, memes and communities for distribution, and funding rates put a price on crowding.

BNC is the most extreme early sample of this future. AAOI reminds us that not every stock will be rewritten this way. If traditional finance already provides a deep enough market, crypto will find it hard to move it away; but the bigger the hole left by traditional markets, the easier it is for crypto to grow new forms there.

So the question truly worth asking is not "Will stock perps replace stocks?"

But rather: Which tickers will first develop a peripheral financial system larger than their original stock market?

The answer is likely not Apple, nor Microsoft, but the next batch of BNCs: small market cap, small float, big story, huge global attention, yet traditional finance has not yet built a wide enough road for them.

What these companies lack is not investors, but a big enough casino. Crypto has now discovered that the casino doesn't need to be built inside the stock exchange at all. It can be built next to it, open all day, collecting chips in stablecoins, pricing crowding with funding, storing speculative demand with OI, and then layering on tokenized stocks, lending, vaults, and various DeFi Legos.

More critically, the entire process doesn't even require issuing a single additional share.

When a company with a market cap of just over $100 million can have its perpetual market generate nearly $100 million in OI over a weekend, while Nasdaq has not yet opened, discussing "whether stock perps are just a crypto fad next to stocks" no longer makes much sense.

It is a new exchange.

It's just that this exchange has no bell, no trading floor, and doesn't need to wait for 9:30 a.m. in New York.