Bakkt Launches CFTC-Regulated Bitcoin Options Contracts and Cash-Settled Futures
The Intercontinental Exchange’s (ICE) cryptocurrency venture, Bakkt, has launched Bitcoin options contracts and cash-settled futures contracts that use its physically-settled bitcoin contracts as a benchmark.
In a blog post published by Bakkt’s COO Adam White, Bakkt compared the Intercontinental Exchange’s Brent Crude Oil Futures, which it claims are “one of the most important contracts ICE would ever offer,” to its ambitions regarding bitcoin. The ICE has launched an umber of swaps, options, and futures contracts based on its crude oil product.
Adam White’s blog post reads:
By starting with the physically delivered Bakkt Bitcoin (USD) Monthly Futures, we have a benchmark contract which provides the foundation for us to develop complementary products based on the needs of our customers.
Bakkt’s initial trading volumes for its physical futures contract were rather low, but have been picking up lately with the monthly futures contracts trading over $120 million so far. Bakkt’s options contract is the first regulated by the U.S. Commodity Futures Trading Commission (CFTC) to hit the market, with one from the CME expected to be launched next month.
On the post Bakkt noted its monthly options contract will have no exposure to spot markets. Options are derivatives based on the value of an underlying asset that give the contract’s holder the option to buy or sell, depending on the type of contract they hold, the asset.
As CryptoGlobe reported, Malta-based crypto exchange OKEx has also announced it’s going to offer its traders options trading later this month on December 27, with a simulation starting on December 12.
It’s worth noting Bakkt is also looking to launch a crypto “consumer app” next year, with Starbucks being its first partner on it. The app will reportedly help its users buy goods and services using bitcoin.