Bakkt, the Bitcoin futures exchange and digital assets platform founded in 2018 by the Intercontinental Exchange (ICE,) let the world know in the last few hours that it will launch the initial regulated options contract for BTC futures next month, most precisely, on December 9th.
The BTC futures exchange stated that the most crucial offerings of the Bakkt Bitcoin Options contract are options analytics, the opportunity to send and receive instant messages, block trades, conveniently low fees, capital efficiency, cash or physical settlement, and European style options, among others.
Features and Offerings
The last feature consists of an option contract that will limit the opportunity for early execution and will also reduce operational loads, according to information provided by the company.
The regulated options contract for BTC futures is, according to an explanation provided by the CEO Kelly Loeffler, based on clients’ feedack. The primary intentions are to hedge and obtain enhanced BTC exposure.
Bakkt said that “ICE Futures U.S. has self-certified the contract with the CFTC and we’re excited to leverage the benchmark futures prices and institutional-grade custody to meet the needs for a regulated options contract.”
Based on the Bakkt Monthly Bitcoin Futures Contract
Loeffler explained that the Bakkt Bitcoin Options contract will be modeled after the Bakkt Monthly Bitcoin Futures contract, a prominent type of Bitcoin futures contract launched with the Bakkt Daily Bitcoin Futures in September.
To be more specific, the firm will charge $1.25 per options contract from January 2020 on, after launching the initiative without a fee in December, per Loeffler.
“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. 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,” Bakkt said.
The announcement came just a few hours after BTC futures volumes on the platform achieved a new historic high when it comes to BTC futures contracts. The price of the world’s premier cryptocurrency kept falling in recent days, as it dropped approximately $500 on October 23rd, below the $8,000 mark.
Building Liquidity
“Since launching the Bakkt Bitcoin Futures just one month ago, we’ve been working closely with market participants to build liquidity, create market transparency and build open interest. Notably, we saw a record 590 contracts of Bakkt Bitcoin Monthly Futures change hands yesterday, October 23. We also completed a milestone with seamless physical deliveries in both our daily and monthly bitcoin futures contracts,” the firm announced.
At the dawn of the month, the Intercontinental Exchange (ICE,) which is the body behind the New York Stock Exchange and Bakkt itself, performed the first block trade of Bakkt BTC futures contract.
“Bakkt Bitcoin Futures have tight bid-ask spreads throughout U.S., European and Asian trading hours, and we continue to onboard new institutional and retail customers,” the announcement read.
By Andres Chavez
