Bakkt announces launch of Bitcoin options contract in December

by Osiris Team

Posted on Oct. 24, 2019, 3:05 p.m.
Development Regulatory
Time to read: 2 min

A day after Bakkt recorded its highest Bitcoin monthly futures trading, the platform announced that it would be taking another step ahead by launching Bitcoin options contract, which will be based on its Bitcoin monthly futures contract. The announcement was made on the official Medium blog post, with CEO Kelly Loeffler stating,

“The new contract is based on customer feedback and is designed to hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies.”

The Bitcoin options contract will go live toward the end of this year on December 9, 2019. Moreover, the launch would also mean that Bakkt would become the first platform to launch a regulated Bitcoin options contract on Bitcoin futures. According to the post, ICE Futures US got a greenlight from Commodity Futures Trading Commission [CFTC] and would leverage its already existing Bitcoin futures prices and custody solutions.

Bakkt said on Twitter,

“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”

The Bitcoin options contract offered by Bakkt will have eight key features: Capital efficiency, cash or physical settlement, European style options, attractive fees, broad distribution and liquidity, instant messaging, block trades, and options analytics.

On the performance of Bakkt’s Bitcoin Monthly Futures contract, Kelly Loeffler said,

“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 announcement comes at a time when its competition, CME Group, announced that it would be launching Bitcoin options in early 2020, after gauging customer demand. CME had stated,

“[…] We believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk.”

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