Pioneering Crypto Bank, Sygnum, Launches Bitcoin and Ethereum Options Contracts
Swiss-based Sygnum has launched bitcoin and ether options for customers who want to execute more sophisticated cryptocurrency trading strategies.
Digital asset bank Sygnum has launched over-the-counter (OTC) cryptocurrency options for customers, per its official press release. Synum received regulatory approval from the Swiss Financial Market Supervisory Authority (FINMA) in September 2020, allowing the bank to offer regulated digital asset trading services.
Sophisticated Trades and Premiums
The crypto bank says the new asset offering would enable its clientele to execute sophisticated investment and trading strategies. The options would be available on both BTC/USD and ETH/USD trading pairs. The press release explains,
“Options have long played an important role in traditional financial markets as a tool to help investors navigate through unpredictable market conditions. By paying the option premium, buyers can participate in larger price swings, while sellers leverage elevated volatility levels and collect premium payments to generate additional yield on existing holdings.”
Crypto options are a form of financial derivative that gives the investor the right, not the obligation, to buy assets at a specific price on an agreed date in the future, for which they pay sellers a premium. If the asset’s price on expiration is higher than the agreed price, buyers can execute their contract and take profit or refuse and lose the premium. They are the new rave of the crypto trading world and are slowly outpacing spot trading.
Sygnum’s regulated options offerings include long and short positioning, European OTC call and put options, fully customizable strike and expiry date, and cash settlement. Dominic Lohberger, Head of Brokerage at Sygnum Banknotes said,
“With options, clients can now profit from any price movement – be it a bull, bear, or sideways market. They can also use them to hedge positions, take leveraged exposure to the market or trade volatility.”
A Multitude of Crypto Services
Headquartered in Zurich, Sygnum is known for its forward-thinking approach. The Swiss firm launched a stablecoin (DHCF) pegged to the Swiss franc in 2020. The stablecoin is backed 1:1 with funds kept with the Swiss National Bank. DHCF enables fast and seamless settlements on Sygnum’s platform. Last December, the bank tokenized its shares on the blockchain as it prepares for a public offering.
Sygnum described the move as an essential milestone on its journey towards creating more access to ownership and value. The crypto bank said tokenizing its shares simplifies the process of updating shareholder registry and reduces the administrative bottlenecks in transferring share ownership.