Crypto Exchange OKEx to Launch Bitcoin Options Trading

Popular cryptocurrency exchange OKEx has announced that it will launch bitcoin options trading later this month on December 27.  However, the Malta-based exchange said that simulated options trading will commence on December 12. 

9 December 2019 | AtoZMarkets – As detailed in a press release shared with AtoZMarkets, the move will see OKEx become the first cryptocurrency exchange to offer crypto-to-crypto trading pairs, spot, futures, perpetual swaps, and options trading in a single platform. This move comes ahead of CME’s BTC futures contracts, the testing of which started today.

Both buy and write options will be provided

OKEx will offer its traders both buy and write (sell) options which “enhances trade flexibility and market transparency with trade prices that closely reflect market trends.” Other bitcoin options platforms so far only offered buy options. The exchange’s release notes it’ll use a rigorous anti-manipulation system “designed to prevent close price manipulation.”

OKEx’s CEO, Jay Hao, said:

We have been seeing the increasing demand of crypto derivative products across all our client segments, especially from our institutional clients, which have shown the fastest growing demand in derivative trading, especially on futures or perpetual swap. We aim to provide the broadest range of trading and risk management tools to all our clients.

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Hao noted options are a unique instrument that lets traders manage, price, and hedge the volatility of crypto assets. However, this is done with a combination of contracts. Options are a derivative that gives traders an opportunity to buy or sell an underlying asset. But this depends on the contract they hold after paying a premium.

To access OKEx’s options trading users will have to go through a know-your-customer (KYC) verification process.  They will also pass a suitability test to show they understand what they’ll be trading.

OKEx launching bitcoin options trading comes ahead of CME Group

Derivatives exchange giant Chicago Mercantile Exchange (CME Group) has also been preparing to launch an options product tied to its bitcoin futures on 13 January, while Bakkt is also scheduled to launch its options contracts later today. Crypto exchanges Deribit and LedgerX have already been offering options trading. 

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