The Delta Exchange crypto-currency derivatives trading platform today launched options trading for two major altcoins, Binance Coin (BNB) and Chainlink LINK.
In an announcement on June 19, the exchange indicated that it would follow the launch of its options for BNB and LINK with similar contracts for Tezos (XTZ), Atomic Coin (ATOM), XRP and Litecoin (LTC).
Delta’s CEO, Pankaj Balani, told Cointelegraph that BNB and LINK are two of the most active currencies on the exchange and that the launch of the new contracts was in response to „great incoming interest from traders.
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Delta’s approach to trading cryptomoney options
Delta already offers options for Bitcoin (BTC) and Ether (ETH), in the form of a specifically designed contract called „Move.
As reported, conventional options are tradable derivative contracts that allow market participants to buy a right to buy (a call option) or sell (a put option) a given asset at a specified ’strike price‘. This strike price is determined on or before the expiration date of the contract.
Therefore, options provide exposure factors that include „money“ (the current price of the asset versus the strike price), time to maturity and implied volatility.
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In the case of Delta’s Move contracts, they have been designed to allow market participants to specifically trade the volatility of digital assets, „without taking any directional risk,“ in Balani’s words. He explained that:
„When these contracts are traded, a trader bets on the absolute value of a currency’s price movement rather than on whether the currency goes up or down.“
As Balani explained earlier in an interview with Cointelegraph, the contract is essentially a bundled call and put option, and therefore, is intended to be easier to understand for non-professional (retail) traders.
In line with the rates he currently charges for ETH and Crypto Cash Move contracts, the exchange will have a 0.05% rate on the contract.
The weekly BNB and LINK contracts, and provide up to 10 times the leverage.
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Strong precedent for crypto-currency options in the industry
Balani said Delta has been seeing about $4 million in trades on BTC Move contracts and about $2 million in ETH Move contracts daily.
As reported, several other industry platforms, including OKEx, FTX and Binance, have launched various types of options contracts for cryptomoney traders in recent months.
This January, the Chicago Mercantile Exchange (CME) Group launched Bitcoin futures options, following the launch of Bakkt, the digital asset platform of the Intercontinental Exchange (ICE), one of the first regulated BTC options in the United States.