In what could be yet another feather in its crown, US-based Bakkt is launching CFTC-regulated options contracts for Bitcoin futures today. Bakkt’s options contracts come close on the heels of its futures contracts platform which was launched on September 23 to great hype.
The Bakkt Bitcoin options contracts platform would the first of its kind, and it will be based on the benchmark Bakkt Monthly Bitcoin Futures contracts. Representing another important step towards developing this asset class for institutional investors, the Bitcoin options contracts offered by Bakkt will have eight key features:
Meanwhile, Bakkt is launching options contracts at a time when its futures contracts are doing extremely well. Launched on September 23 this year, Bakkt’s futures contracts have since been making massive strides. Although Bakkt had a tepid launch with just 72 contracts transacted, in subsequent weeks, it has picked up the pace. Shedding the initial inertia, the volume of these futures contracts has been growing steadily, setting new records periodically.
Interestingly, while Bakkt is launching the options contracts today, the world’s leading and most diverse derivatives marketplace, CME Group is bracing itself to offer options on its Bitcoin futures contracts in the first quarter of next year. On September 20 this year, CME said that the launch of Bitcoin options is aimed to provide clients with additional tools for precision hedging and trading.
There is one primary difference between futures and options contracts. While the contract holder is obligated to sell a futures contract on the expiry date, there is no such obligation in the case of options contracts, providing greater flexibility which may impact market prices.