5 Alternative Investment Opportunities For Professional Traders Seeking To Add More Ambition To Their Portfolios

Experienced professional traders know all too well that opportunities can spring up from the most unconventional of places. They also understand the value of taking calculated risks when the right moment arises. This has helped to pave the way for more professional and institutional traders to discover alternative investments with higher risk potential and a greater possibility of high returns. 

As markets recover from the many economic headwinds posed throughout 2022, we see more cautious optimism return to investor portfolios. With this, more professional traders may be looking to make the most of riskier opportunities to capitalize on any prospective upturn in fortunes.

With this in mind, let’s take a closer look at five alternative investment strategies for professional and institutional traders that may help to bring more risk and reward to their portfolios within recovering markets: 

Cryptocurrency Trading

Crypto stands as one of the most exciting innovations in the world of finance, and Bitcoin’s euphoric rise of 40,000% between July 2013 and today has prompted leading institutional traders to become well aware of the potential of cryptocurrencies.

Naturally, there are barriers for professional traders to hurdle in terms of crypto trading that spread far beyond the volatility of the markets. 

Crypto trading has often been hindered by counterparty risk, and the recent high-profile collapses of exchanges like FTX have meant that some traders have been fearful of losing their wealth despite a successful trading strategy. 

Institutionally-focused trading terminals like Skarb, however, enable change by offering a unified terminal that provides a single point of access to manage trading and risk management, while also providing better position monitoring tools for traders. 

Skarb’s engine consolidates over 20 exchanges and more than 6,000 crypto instruments, helping professional traders to access greater liquidity pools without having to trust individual exchanges with their holdings. 

Furthermore, Skarb enables unprecedented scalability for institutions through its responsive back-end architecture which paves the way for faster efficiency and execution times across a vast range of integrated exchanges. 

Because traders have access to Skarb’s comprehensive suite of analytical insights, it’s also possible for institutions and professionals to effectively audit themselves as they go, without having to track performance throughout different platforms. This can be achieved through Skarb’s Main Order Monitor, which allows the tracking and monitoring of orders in real time, no matter which market maker executed the trade. 

Collectibles

Professional traders who ignore the collectibles market may be sleeping on a major market opportunity. In terms of the total available market, Deloitte has estimated that the total global value of art and collectibles equates to around $1.7 trillion, of which around 3-4% is traded each year. 

This makes the collectibles market similar in size to other major private markets, and for institutional or professional traders, it can represent the chance to diversify portfolios into entirely new industries. 

Collectibles can refer to just about anything, from trading cards to paintings, sculptures, memorabilia, whiskey, and other items that are both scarce and intriguing enough to collect. 

In recent years, we’ve seen key institutional players with a focus on Web 3 assets like BlackRock turn to NFTs as an opportunity to broaden their vast portfolio. 

According to a Verified Market Research (VMR) report, the total NFT market could attain a value of $231 billion by 2030. Meaning that there’s plenty of room for growth within the industry, despite harsh pullbacks through the market in 2022. 

Peer-to-Peer Lending

Peer-to-Peer lending is relatively new to the world of investing, which means that it can be a viable fresh avenue to explore for traders and institutions alike. The P2P lending format offers loans for businesses, individuals, and fundraising of just about any kind that would later be paid back with pre-determined levels of interest. 

P2P lending takes place without the need for a central bank, and this means that it can be entirely down to the provider in terms of how much risk to take on. 

Because individuals and entities come to you for lending, there are fewer intermediaries involved, and this is likely to mean that the returns you receive would be significantly higher than those from standard savings vehicles. 

Furthermore, decentralized finance (DeFi) platforms have helped to pave the way for more seamless access to lending tools to make P2P lending more accessible for both institutions and borrowers alike. 

REIT Investments

Real Estate Investment Trusts, better known as REITs, can be an excellent way of diversifying portfolios by incorporating real estate. 

These non-stock options can help to add passive sources of income into portfolios and can help to balance out other risky investments by creating revenue streams even during more widespread market downturns. 

In a nutshell, REITs are companies that either own or finance income-producing properties. From apartments to shopping centers, REITs can invest and manage just about any property type. 

According to Nareit data, 64% of the largest 25 investors in North America include some form of exposure to REITs, and they can provide an excellent balance for portfolios taking on a greater appetite for risk. 

Carbon Credits

Finally, carbon credits can be a great way of bolstering your ESG credentials as a professional or institutional trader. 

Carbon credits take the form of a permit that allows holders to emit a specified amount of carbon or other emissions. For one carbon credit, a holder is allowed up to one metric ton of carbon dioxide. 

So how can carbon credits benefit investors? Credits can be bought and sold through brokers, trading firms, and other retail investing outlets. This means that it’s possible to invest in carbon credits to sell on to companies or entities that are seeking to gain more leeway in terms of their emissions. 

It’s also possible to invest in the KFA Glocal Carbon exchange ETF, which tracks the performance of carbon credits as a whole. 

As we continue to navigate away from the troubled markets of 2022, new opportunities to take on ambitious investments are likely to emerge at an increasing pace. With this in mind, it could be the perfect time to explore and add alternative options to your portfolio. 

With the right level of risk, it’s possible to diversify your portfolio with some refreshing new approaches to investing. Whether you seek to take on the volatile world of cryptocurrency trading, or balance out risky investments with REITs, 2023 may prove to be the ideal year to build a strategy that shapes your future growth.