OKEx Launches Bitcoin Options Trades For A Select Group Of Clients

The cryptocurrency exchange OKEx which is based in the island of Malta has recently launched Bitcoin (BTC) options trading for a group of traders – right ahead of the public launch which is set to occur in January 2020. As we can see, OKEx launches Bitcoin options and confirmed this in a press release.

Currently ranked as the third largest in the world by its daily trading volume globally, OKEx has indicated that the new contract will be settled daily in Bitcoin (BTC). What’s interesting is the fact that an options contract is a popular derivative enabling traders to hedge against asset price swings in either directions. That is why it provides the chance to purchase either a right to buy (a call option) or sell (a put option) of a given asset at a specified “strike price.”

As OKEx launches Bitcoin options, the crypto news also show that the contracts will be based on the Black-Scholes pricing model. This valuation algorithm has been the basis for the pricing model of many options on traditional markets and assets ever since the 1970s. The contract will use real-time data and is now being introduced as part of a revamp of the platform and its entire trading infrastructure.

Along with margin trading, options, futures and perpetual swaps markets are some of the most popular terms in the crypto space. The Bitcoin news now also feature the financial market director at OKEx Lennix Lai who issued a statement and said:

“Options are a unique instrument that enables traders to manage, price and hedge the volatility of crypto assets […] to take advantage of more than just market direction. We welcome clients from different segments, especially from our institutional clients, who have shown the fastest-growing demand in derivatives trading, especially on futures and perpetual swaps.”

Right after OKEx launches Bitcoin options and their limited initial availability, the new contract will be open to public access on January 9, 2020.

Meanwhile, the Chicago Mercantile Exchange (CME) Group has spoken about the Asian market and how it expects to see a high demand in Asia for its forthcoming Bitcoin options product. Just like that, options are getting more popular and according to the head of equity at CME, unlike futures, they have the advantage of offering either downside protection or upside exposure.