Bybit launches crypto options settled in USDC stablecoin
Cryptocurrency exchange Bybit now offers put and call options contracts settled in USD Coin (USDC), a major stablecoin pegged to the US dollar.
Calling the news an industry first, the firm said that unlike Bitcoin-settled contracts, settling its options trading market in USDC allows for stable prices for the duration of each contract.
The new product addition will help traders take advantage of volatility, hedge risk and discover prices through options, which are generally simple and have no special or unusual features.
For investors interested in this new trading vehicle, USDC-settled options contract follows the European-style options, which may be exercised only at the expiration date of the option, i.e., at a single pre-defined point in time. It can be traded through the portfolio margin, which adopts a risk based model for experienced traders, including market makers and institutional clients, to increase fund utilization based on the underlying price and volatility.
Bybit’s portfolio margin account supports USDT, USDC, BTC and ETH as collateral, with more assets to be added soon. The exchange’s users will also benefit from the newly-launched unified margin account, which enables them to use all assets under their account as collateral to trade USDC options contracts as well as perpetuals.
The roll-out of options product came on the heels of a trial period which examined common feedback in order to improve the user experience of optimization of margin and risk control mechanisms.
Bybit supports mass adoption of crypto investment
This function will support Bybit in becoming a fully integrated trading powerhouse with a user-friendly interface that provides open API support, to facilitate flexibility in trading European-style, linear options.
As more sophisticated investors enter the crypto market, the notice reflects increasing investor interest in trading derivatives, which let traders make bets on the price of cryptocurrencies without the need for actual delivery.
Both futures and options are a way for investors to bet on the trends of a cryptocurrency price without having to actually hold the underlying coin, which skirts regulatory and custodian issues. However, futures are, in general, riskier than options as the only financial liability for the latter is the premium paid at the purchase time. On the other hand, futures contracts involve maximum liability.
“We have been very pleased by the roll-out of our options trading product,” said Ben Zhou, co-founder and CEO of Bybit. “We have received excellent feedback from our users too — they love our user-friendly products. Coupled with our 24/7 multilingual customer support, we have been able to help all traders take trading to the next level with a wide range of financial products. Our derivatives platform has the world’s best liquidity and tightest spread, so traders are ensured the best quote and best execution in the market even during extreme volatility.”