On October 24, Bakkt CEO Kelly Loeffler passedMediumOn October 24, Bakkt CEO Kelly Loeffler passed
Announced that Bakkt will launch options contracts based on Bitcoin futures on December 9.
An option, as the name implies, is a right that gives the holder the right to buy or sell an asset at a fixed price on a certain date (or before that date).
Different from the main spot options such as Binance, Bakkt launched Options on Futures this time, that is, trading the right to buy and sell futures contracts instead of spot.
Just like futures are a hedging tool for spot, futures options can provide a hedging tool for futures on its platform. Most of the futures varieties in the international market have introduced option trading, and the digital currency market, which is sensitive to wealth, is now beginning to use it.
From the launch of futures contracts more than a month ago, to market rumors that options will be pushed two weeks ago, to today’s official announcement, Bakkt’s actions are getting faster and faster, and it seems that it wants to firmly seize the opportunity that was previously delayed due to slow movements.
On October 11, several sources familiar with the product roadmap of the Intercontinental Exchange (ICE, the third largest futures exchange in the United States) revealed that Bakkt, a subsidiary of the exchange, is considering launching a bitcoin options contract in order to cooperate with CME (Chicago Mercantile Exchange). ) to compete. CME, on the other hand, just officially announced on September 20 that "it will launch bitcoin options in Q1 of 2020, and is currently awaiting review by regulators."
The battle for the next city in derivatives trading has begun.As Li Lianxuan, a senior researcher at OKEx, said, “。”
In a highly competitive market, only innovative companies can survive. If you don’t do it, other companies will naturally do it. If you don't occupy the market share by yourself, others will occupy it
At present, major exchanges that have clearly announced their entry include OKEx, BitMEX, CME, etc., while exchanges such as Binance and LedgerX have already provided spot option products for users. In particular, the derivatives exchange LedgerX began to launch long-term bitcoin options products as early as 2017.Closer to home,In addition to the very different subject matter,
The option products launched by Bakkt have the following characteristics:
First, the product has been certified by the U.S. Commodity Futures Trading Commission (CFTC) as the “first regulated” option on bitcoin futures. As an exchange backed by the ICE tree, Bakkt will also gain the parent company's broad audience and high liquidity. “ICE is accessible to users around the world, with dedicated market makers providing liquidity.”
Furthermore, the cash + physical dual settlement method is adopted, the contract period is one month, and the European option model (the option can only be exercised on the exercise date, which is opposite to the American option that can be exercised at any time before the expiration date). In terms of rates, Kelly said that starting from January 2020, each option contract will be priced at $1.25 (1 contract = 1 bitcoin).
In addition, Bakkt will use ICE option analysis to provide option evaluation to help users analyze and control risks.
Bakkt's move can be understood as a further improvement and upgrade of its futures market. Kelly revealed in the announcement that as of October 23, the trading volume of Bakkt monthly futures contracts reached a record 590 contracts, while achieving seamless physical delivery of daily and monthly contracts.
