Bakkt to Bring Options Contracts for BTC Futures Next Month

Crypto platform Bakkt on Thursday announced that it would add options contracts for Bitcoin futures to its offerings.

Scheduled for a launch on December 9, the upcoming contracts will offer both cash and physically-settled delivery. Moreover, the contracts are designed in European style to avoid early exercise and reduction of operational burdens.

“We’re committed to bringing trust and utility to digital assets and the options contract is an example of the many products we’re developing for regulated markets,” Kelly Loeffler, chief executive of Bakkt, wrote in an official Medium post.

A flop-turned hit

The Intercontinental Exchange (ICE)-subsidiary introduced physically-settled Bitcoin futures in the United States last month after a tussle with the regulator for approval.

Though the investment instruments were much anticipated in the industry, they failed to make an impact in the market initially. However, with the recent drop in Bitcoin price, the trading volume of the contracts surged suddenly, reaching nearly $5 million in a single day.

Seems like a record day for Bakkt yesterday!

Traded $4.5mln approx ~5x the average daily volume pic.twitter.com/ts2hClA6w4 — skew (@skew_markets) October 24, 2019

“The Bakkt Bitcoin Options contract will be based on the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors, their customers, and investors,” Loeffler added.

The crypto platform is boasting features like capital efficiency, broad distribution and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, block trades, and options Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Read this Term as features of the upcoming options contract.

As for the fee, the platform will charge $1.25 per options contract (1 contract = 1 bitcoin) starting in January 2020, following the fee waiver in December 2019.

“We’ve been working closely with market participants to build liquidity, create market transparency and build open interest,” Loeffler added.

Bakkt’s competitor in the US market - CME Group - is also set to bring Bitcoin options on the market. However, the ICE-subsidiary will beat the Chicago-based exchange as the latter is planning to bring the contract in the first quarter of next year.