OKEx Runs Test for Bitcoin (BTC) Options
OKEx has risen as one of the leaders in BTC derivative trades, now adding options for selected traders.
OKEx has announced the expansion of its derivative trading, this time by launching a test on Bitcoin (BTC) futures. The exchange, which is also one of the leading spot markets, has also become highly active in futures trading, taking up the top spots among BTC futures operators.
Options are riskier, but allow for trading BTC based on predictions. Currently, predictive markets are gaining speed, as expectations are becoming more important even than real activity on the spot markets.
Options on futures are already available on the Bakkt exchange, and will be added by the CME futures market in January 13. BTC remains highly volatile and unpredictable, but it is precisely this feature which allows traders to bet on price moves. This has created a new scene of bulls against bears, as price predictions compete against each other.
OKEx has opened a form to gather data and allow options trading by invitation only in the initial stages. The exchange warned that the market is live, and uses real funds to settle. Options contain more risk, as they rely on making pure bets, and losses may accrue quickly.
The OKEx options will gather pricing information from multiple exchanges, to avoid the swaying of prices from a single source. The market operator is working on risk management, as well as increasing the liquidity of the market, explained Enzo Villani, OKEx head of international strategy and innovation.
Options give traders the right, but not the obligation to sell or buy BTC at a certain price. Options are becoming mainstream, and may boost the potential for miners and other traders to hedge their risk.
However, the unrolling of options may go with a cautious attitude, as the instrument can also lead to significant losses.
BTC currently trades at $7,246.83, on volumes around $21 billion’s equivalent in 24 hours. Without derivative instruments, BTC has been swayed by whales and spoof orders, and the presence of futures traders opens another set of price pressures.