Bakkt Crypto Derivatives Exchange announced the launch date of an option contract for bitcoin futures, it is set for 9th December. Options on futures contracts give the buyer the right to buy or sell a particular futures contract at a predetermined price on the expiration date of the option.
According to Bakkt CEO KellyLoffler, a new product created “based on customer feedback and designed to hedge revenue and ensure cost and capital efficiency”. Bakkt's Bitcoin Options Contract “represents another important step in the development of this asset class for institutional investors, their clients and investors.”
The Bakkt Bitcoin Options contract will be basedon the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors https://t.co/4ZE0LIBJJP
- Bakkt (@Bakkt) October 24, 2019
“Bakkt Bitcoin futures options are another important step towards developing this asset class for institutional investors, as well as their clients and investors.”She added.
How will Bakkt Futures Options work?
When working with futures, both parties are required toto fulfill the terms of the contract, however, the option gives its buyer the right, but not the obligation, to buy or sell the asset at a predetermined price at a certain point in the future. In this case, the option seller cannot refuse to fulfill the terms of the contract. He compensates for additional risks with the premium that the buyer gives him when concluding the contract.
According to Loeffler, ICE Futures USI used the self-certification procedure for a new instrument to bring it to the market in accordance with the provisions of the US Commodity Futures Trading Commission (CFTC).
“We are committed to building the trust and value of digital assets, and option contracts are an example of one of the many products we develop for regulated markets.”- said CEO Bakkt.
Unlike Bakkt bitcoin futures, option contracts will allow platform clients to receive payments in traditional currency, which does not exclude the possibility of paying the cryptocurrency itself.
Loffler also mentioned that on Wednesday Bakkt set a new record for trading monthly bitcoin futures, amounting to about $ 4.8 million.</p>