Huobi Futures has announced the upcoming launch of Bitcoin Options trading, which will go live on September 1st at 10:00 UTC. According to a blog post announcing the launch, the BTC options will be quoted in USDT and offered in weekly, bi-weekly, and quarterly increments.
The blog post also says that the new product “aims to give traders more ways to create arbitrage and hedge risk in the crypto market.” This is because options products offer traders the right, but not the requirement to buy or sell BTC at an agreed-upon price and time.
The Bitcoin options were launched in response to demand for “more diverse trading products”
“Financial instruments like options don’t guarantee profits, but they do provide traders with greater flexibility and more opportunities,” said Ciara Sun, vice president of Global Business at Huobi Group. “More importantly, we’re giving users access to an options product backed by the security and reliability they’ve come to expect from a global exchange like Huobi.”
Specifically, “call options” offer the buyer of the options the right to purchase the underlying asset at a specified price on a specified date, while put options give the buyer the right to sell at a specified price and date.
Ciara Sun also said that the options were launched in response to market demand.
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“As investors brace for prolonged economic uncertainty across global financial markets, the influx of institutional capital and other forms of ‘smart money’ into digital assets like Bitcoin are driving a surge in demand for more diverse trading products,” she said.
A surge of growth in derivatives markets
Huobi has also seen a surge in derivatives trading volume across the board. “In the aggregate, growth in crypto derivatives trading volume is now outpacing that of spot trading,” Huobi’s announcement said.
Indeed, data from Cryptocompare shows that cryptocurrency derivatives trading volumes climbed 32% in May of this year to a new record high of $602 billion, compared to 5% growth in total spot trading volumes.
During an interview with Finance Magnates in June, Ciara Sun noted that much of the growth in crypto derivatives markets can be attributed to institutional investors.
“The cryptocurrency market can be very good for traders who can hedge their risks while still finding arbitrage,” she said. Derivatives contracts like futures contracts and perpetual swaps have become increasingly popular amongst the institutional crowd.”
“Institutional investors are very active in the spot markets, but we’re seeing even more growth in the futures and derivatives market.”