- Beating CME to the punch with first regulated options contracts for bitcoin futures
- After a record day, Bakkt continuing the winning streak today as well
Bakkt will be launching the first regulated options contract for bitcoin futures on December 9, announced Kelly Koeffler, Chief Executive Officer of Bakkt on Oct. 24.
As part of its commitment to “bringing trust and utility to the digital assets market,” the company is launching the options contracts.
These Bitcoin Options contracts will be based on the benchmark Bakkt Monthly Bitcoin Futures contract which Loeffler said is “another important step in developing this asset class for institutional investors, their customers, and investors.”
“ICE Futures US has self-certified the contract with the CFTC.”
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 https://t.co/4ZE0LIBJJP
— Bakkt (@Bakkt) October 24, 2019
First regulated options contract for Bitcoin Futures
These new contracts will allow investors to hedge or gain bitcoin exposure and generate income. The options will settle into Bakkt’s monthly bitcoin futures contract with time to close out positions or take physical delivery.
During its opening month, the fee on these options contracts will waver while starting January 2020, the exchange will charge $1.25 per options contract where one contract is equal to one BTC.
These are European style options meaning it avoids early exercise and reduced operational burdens.
Instant messaging, block traders and options analytics are other features of these options for bitcoin futures.
As Bitcoin Exchange Guide reported last month, CME announced that it will launch options on Bitcoin futures in Q1 of 2020 due to increasing demand. Tim McCourt, CME Group’s global head of equity products and alternative investments also said that he expects the product to be as popular as Bitcoin futures, especially with Asian traders.
But Bakkt has beaten CME to the punch.
A Record Day
On Oct. 23, as we reported, Bakkt saw a record 590 contracts of Bitcoin monthly futures changing hands.
The platform also “completed a milestone with seamless physical deliveries in both our daily and monthly bitcoin futures contracts.”
Daily summary of Wednesday's Bakkt Bitcoin Monthly Futures:
💸 Traded contracts: 640 (+653%) (New ATH 🚀)
📈 Day before: 85
🚀 All time high: 640
— Bakkt Volume Bot (@BakktBot) October 24, 2019
After the disappointing performance in its opening month, yesterday Bakkt finally saw a significant increase of over 653% from the previous day. This surge came on the heels of a drop in BTC price.
Bitcoin flash crashed yesterday from around $8,000 to just under $7,300. Currently, BTC is trading around $7,500 with 24 hours gains of 0.03%, as per Coincodex.
The jump in Bakkt’s physically-settled bitcoin futures is continuing today as it records 195 BTC in volume with half of the day still left.
Key features of the Bakkt Bitcoin Options contract include:
• Capital efficiency
• Cash or physical settlement
• European style option
• Attractive fees
• Broad distribution and liquidity
• Instant Messaging
• Block trades
• Options analytics