Cryptocurrency exchange OKEx is launching bitcoin options trading later this month, according to an announcement made on Monday.
The Malta-headquartered exchange currently offers spot and futures trading in cryptocurrencies, and starting cash-settled options trading in BTC/USD pair on Dec. 27 due to institutional demand.
“We have been seeing the increasing demand of crypto derivative products across all our client segments, especially from our institutional clients, which have shown the fastest growing demand in derivative trading, especially on futures or perpetual swap,” said Jay Hao, CEO of OKEx.
The exchange said while other trading platforms only support buy options, its offering will have both buy and write (sell) options. Options contracts offer traders an opportunity to buy or sell an underlying asset depending on the type of contract they hold.
To access OKEx options, users will have to go through a know-your-customer (KYC) verification process, as well as pass a suitability test to show they understand options trading, per the announcement.
Derivatives exchange giant CME Group has also been preparing to launch an options product tied to its bitcoin futures on Jan. 13, while Bakkt is also scheduled to launch its options contracts later today. Crypto exchanges Deribit and LedgerX have already been offering options trading.
How far OKEx have come
On April 11, 2018 the company announced its expansion to Malta, given the country’s efforts to provide a sound regulatory framework for blockchain businesses and digital asset exchanges.
In May 2018, the exchange became the world’s largest cryptocurrency exchange by reported turnover. On July 30, 2018 a trader reportedly bought bitcoin futures with a $416 million notional value on margin, before being forced by the exchange to liquidate his position at a large loss.
The exchange injected 2,500 Bitcoins – worth about $18 million at current prices – into an insurance fund to help minimize the impact on clients. However, to cover for the outstanding amount, traders who had made an unrealized profit during the previous week still had to pay a clawback rate of 17 percent, a so-called “socialized clawback”.
OKEx is a digital asset exchange platform that allows cryptocurrency investors to trade with BTC, ETH, LTC and other cryptocurrencies in a secure and simple manner. The platform was started by Start Xu, a Chinese businessman.
OKEx exchange complies with the law of the people of the Republic of China. One of the branches of this platform caters to the cryptocurrency trading and exchanging needs of the people of China. The headquarters of the international branch of OKEx is in Beijing.
The second branch of this standalone cryptocurrency exchange platform is built for users from different parts of the world. The headquarters of the second branch of this exchange is located in Hong Kong.
One of the benefits of using this exchange platform is that it will not take more than a few minutes for an investor to get used to the interface of this platform regardless of their trading experience. This platform is great for new cryptocurrency users because it effectively supports the trading of the wide majority of different popular cryptocurrencies.