As the crypto market advances and matures, the demand for more sophisticated trading products has risen. For instance, options trading, which has its roots in the traditional finance (TradFi) ecosystem, is now one of the most popular products in the crypto space.
Several exchanges already offer crypto options trading for some popular digital currencies, including Bitcoin (BTC) and Ethereum (ETH). Realizing the growing popularity of crypto options trading, crypto exchange Bybit is also expanding into the options trading market.
Bybit has just revealed that the exchange platform will launch a crypto options trading feature to complement its existing suite of perpetual and expiration futures contracts.
Options trading is a type of derivative trading that allows traders to speculate on the future value of cryptocurrencies. Like other derivatives, options have leverage embedded in the actual trading product. Options give the option-holder the right, but not the obligation, to buy or sell a cryptocurrency on the expiration date.
In contrast to futures contracts, whereby the transaction must be concluded at settlement, usually exchanging an underlying asset for cash, options contracts are “optional,” meaning they automatically expire if the buyer doesn’t execute the transaction.
Forthcoming Options Feature
The to-be-launched ByBit options trading feature will initially offer margin trading in USDC-denominated options. With Bybit’s options contracts, users can take positions based on expectations of the future prices of an asset in USD, and settle their trades in USDC, empowering the platform’s traders to broaden their possible investing strategies.
At the same time, sophisticated users like market-makers and institutional investors can use these products to apply a risk-based model to maximal fund utilization.
The launch of options trading will position Bybit as a fully integrated crypto trading ecosystem capable of supporting institutional investor needs through open API support while facilitating flexibility in European-style linear options trading.
On the platform’s expansion into more sophisticated trading products, Ben Zhou, co-founder and CEO of Bybit, noted, “Options is something that our existing clients have long been asking for since there has been no other revolutionary product offered in the market at the moment. We are confident that our state-of-the-art offering will set the bar for the sector and normalize crypto options trading, just like what Robinhood did for stock options. We are also excited to bring with us to options trading the world-class liquidity and reliability our clients have come to associate with Bybit.”
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