ErisX Launches Cash-Settled Contracts to Help Limit Investors Exposure to Market Volatility
The cryptocurrency derivatives platform ErisX has now introduced cash-settled bounded futures to protect against market volatility and enable short positions in the crypto market.
Chief Executive Officer of ErisX Thomas Chippas said the firm wants to encourage traders interested in trading spot Bitcoin. By adding physically settled futures to the platform, traders will protect the futures clearinghouse and futures exchange.
Unlike physically settled contracts, the nature of cash-settled contracts means they do not need Bitcoin delivery. This enables investors to still profit from Bitcoin, even when they don’t have enough to invest heavily.
Chippas reiterated that the only way investors and traders will be drawn to physically traded futures is when exchanges start offering them on margin. He further revealed that ErisX has reached out to the U.S. Commodities Futures Trading Commission (CFTC) to enable the exchange to provide margined accounts for physically settled futures.
Meanwhile, the launch of cash-settled bounded futures, according to Chippas, will offer both lower and upper bonds on losses and gains, which protects investors from high volatility in the market.
Traders can gain more crypto exposure through the platform.
ErisX gained approval from CFTC to offer additional trading services on its platform.
There is a minimum potential risk of trading cash-settled contracts, and it requires less collateral than other contracts.
Bounded Futures also protect holders against volatility in the market, as it enables short positions in the market. Traders can quickly cash out in the market when they discover that the trade is going against them.
The contracts are entered and settled in cash, enabling customers to gain more crypto exposure, even those who may have restricted access in the market.
He added that the bounded funds would offer traders the chance to profit even from a volatile market by allowing cost-efficient strategies. As a result, they manage their risks effectively and still reap good rewards from their investments.
“These contracts are one initiative among many that we have been working on to simplify access to the crypto markets,” Chippas said, pointing out that the goal of the exchange is to make trading simpler for traders.
Offering lesser trading risks
Another interesting feature is the bringing of all options on a single platform for traders. As it stands, ErisX offers traders the right access to crypto markets while maintaining performance and security. It’s currently the only US-based exchange that allows customers to trade regulated and spot futures on a single platform.
The exchange also has a reward or bonus policy where new clients are rewarded with a $50 token for their next transaction after completing signup and making their first transaction.
The exchange says it’s in the company's goal and interest to continue offering maximum security and protection of traders’ funds even as they take advantage of the market volatility.