Bitfinex to Offer Options Trading; Are Exchanges Racing to Board the Crypto Derivatives Train?
November 13th, 2019
Derivatives trading in the crypto sphere has been a matter of speculation and discussions. Of late, a surge in the number of platforms offering derivatives trading has been witnessed. In a recent update, leading cryptocurrency exchange, Bitfinex announced that it is considering launching options trading in the first quarter of 2020. Let’s have a look at the platforms that are racing to launch new crypto derivatives soon.
Bitfinex Announces Launch of Options Trading
Per a recent announcement by Paolo Ardoino, CTO of Bitfinex and Tether, Bitfinex plans to offer options trading in the first quarter of 2020. After iFinex Financial Services, a subsidiary of iFinex, launched derivatives this summer, the exchange has now turned its focus on options.
“That was a big project. It required a few months of full-time development.”
Another development in line for the exchange are Tether-based swaps. One of the primary reasons to launch Tether-based swaps is to build trust and a wider reach for Tether. Furthermore, Arduino said he’s currently working with external market makers to ensure liquidity.
Bakkt To Offer Options Trading Starting December 9th
Bakkt, is all set to launch first regulated options contracts for Bitcoin futures on the 9th of December. The options contract will be based on the Bakkt Monthly Bitcoin Futures contract. The new contract has been designed as per customer feedback and has been designed to hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies.
As a matter of fact, ICE Futures U.S has certified the contract with the CFTC. The fees has been set at $1.25 per options contract where 1 contract is 1 Bitcoin. Also, the contracts will be margined contracts and the platform will allow for cross-margining with underlying features contract.
CME To offer Options on Bitcoin Futures in early 2020
The previous month Chicago Mercantile Exchange (CME ) Group announced the launch of options on Bitcoin Futures. CME futures are set to launch on the 13th of January and are being launched on popular customer demand. The options on CME futures will further help traders mitigate possible risks of counterparty default with a central clearing. Also, they will give rise to wider variety of choices for traders and help them in managing risk and building strategies by supporting flexible trading.
The BTC options will be priced off of the CME Bitcoin Reference Rate, an index that references pricing data from several cryptocurrency exchanges. Presently, made up of the likes of Bitstamp, Coinbase, itBit, Kraken, and Gemini. Subsequently, they will settle into the CME Bitcoin futures contract which trades under the ticker BTC and equals five bitcoins.
Tassat Wins CFTC Nod to Offer Physically- settled Bitcoin Swaps
Earlier this week, the U.S. Commodity Futures Trading Commission (CFTC) gave green light to Swap Execution Facility (SEF) operated by cryptocurrency startup Tassat. The latter previously known as trueDigital rebranded itself in September as a derivatives trading platform. While the exact launch date continues to be in close wraps, the exchange is actively onboarding institutional participants and will soon launch physically-settled Bitcoin Margin Swaps.
Are Ethereum Futures in the Making?
In All Markets Summit by Yahoo Finance Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert spoke about Ether(ETH) being a commodity and thus should fall under the jurisdiction of CFTC. During the DC Fintech Week, Tarbert confirmed that Ethereum futures are around the corner. While no specified launch date was provided, a rough estimate of 6 months to a year was given.