ICE Announces Completion of First Bitcoin Options Block Trade


ICE announces the completion of its first Bitcoin options block trade. The first trade was already done between Galaxy Digital Trading and XBTO firms.

13 December, 2019 | AtoZ MarketsIntercontinental Exchange (ICE) is a US-based Fortune 500 company that was established in the year 2000 to modernize markets. The company provides an operating exchange, clearinghouses, and information services to its customers. 

They mainly focus on invest, trade and manage risk across global financial and commodity markets.  According to the official announcement, ICE announced its first block Bitcoin Options trade of the newly offered Bakkt bitcoin monthly options contracts which was submitted to ICE Futures US.

Crypto Community’s Opinion on Bitcoin Institutional Products  

The overall sentiment on the crypto industry was bullish after the launch of the first Bitcoin Futures in December 2017. Not only did the price of the underlying asset drop 65% since its launch in 2017. In recent months the bullish sentiment has faded. Since the Crypto community has been criticizing the Bitcoin institutional investment products. 

Moreover, the main difference between Bitcoin futures and options is that the contract holder must sell a futures contract on the expiry date of the contract. However, for Bitcoin options, there is no need to sell the contract on the expiry date. This gives flexibility to the trader which might impact the market prices. Moreover, a block trade gives options to the traders to privately negotiated trade with a minimum size threshold.

Details of ICE’s First Bitcoin Options Block Trade 

The first trade was done between Galaxy Digital Trading and XBTO. Bakkt Bitcoin Options settle into the underlying Bakkt Bitcoin (USD) Monthly Futures contract two days prior to expiry. The Bitcoin contract price discovery always happens within a regulated market. This will give no subjection to unregulated Bitcoin spot markets.  

Galaxy Digital Trading’s Head of Trading Strategy, Josh Lim commented that the launch of such Bitcoin Options on a regulated exchange will benefit digital assets greatly. Since, Bitcoin options lead to deeper liquidity. 

Adding to this, the President of ICE Futures US stated that these Bitcoin Options provides their customers “a capital-efficient new tool for trading and for managing volatility, price risk, and income generation.”

CME Bitcoin Options Contracts Are Also Due for Launch

ICE is not the only US regulated exchange to launch its Bitcoin Options contracts. Also, the Chicago Mercantile Exchange (CME) also has plans to launch their Bitcoin Options Contracts. 

According to the plans of CME, the US exchange will launch its Bitcoin Options contracts on January 13, 2020.

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