Eurex announces Bitcoin index options

Rick Steves

The addition of Bitcoin index options is expected to provide investors with more avenues for hedging their Bitcoin exposure, while also offering a way to capitalize on Bitcoin’s volatility in a regulated environment.

Eurex, the European derivatives exchange, is set to launch Options on FTSE Bitcoin Index Futures on October 23, 2023. The launch comes on the heels of Eurex’s successful introduction of Bitcoin index futures earlier this year and marks another milestone in the exchange’s efforts to offer regulated access to digital assets.

The crypto market’s volatility has heightened the demand for a secure, regulated trading environment, particularly among institutional investors.

Liquidity supported by order book and over-the-counter providers

“Investors need robust trading and clearing safeguards when engaging in the crypto market,” said Randolf Roth, Member of the Executive Board of Eurex Frankfurt AG. Eurex aims to meet this demand by partnering with FTSE Russell, an established index partner, and leveraging the services of Eurex Clearing, an AA-rated clearing house in Europe.

FTSE Russell, which already has a strong governance framework in place for its equity and fixed-income products, will extend the same level of rigor to its digital asset indices. “The right derivatives strategy starts with the right index,” noted Shawn Creighton, Director of Index Derivatives Solutions at FTSE Russell. The new Options on FTSE Bitcoin Index Futures will be underpinned by a robust vetting methodology developed in collaboration with Digital Asset Research (DAR).

The newly listed contracts will be available in both USD and EUR, with each option contract equivalent to one Bitcoin. Both options and futures will expire at 17:00 CET on the last Friday of the month, providing traders with a range of expiry options, including monthly, quarterly, and weekly maturities.

Liquidity for these new offerings will be supported by order book and over-the-counter providers, ensuring a smooth trading experience for investors.

Bitcoin index options for hedging and capitalize on volatility

Since its introduction in April 2023, Eurex’s Bitcoin index futures have seen more than 50,000 contracts traded, amounting to USD 1.3 billion in notional value. The addition of Bitcoin index options is expected to provide investors with more avenues for hedging their Bitcoin exposure, while also offering a way to capitalize on Bitcoin’s volatility in a regulated environment.

This latest addition to Eurex’s crypto derivatives suite could act as a catalyst for wider institutional adoption of cryptocurrencies. By offering a regulated path to crypto trading, Eurex is not only helping to legitimize digital assets but is also offering a higher degree of safety and transparency that could attract more traditional investors into the crypto space.

Furthermore, the partnership with FTSE Russell adds a layer of credibility and governance, ensuring that the products meet the highest institutional standards.

In summary, Eurex’s foray into Bitcoin index options could mark a turning point for institutional crypto trading. As the demand for secure, regulated crypto trading platforms continues to grow, Eurex is positioning itself as a trusted player in this evolving market.

The launch of Options on FTSE Bitcoin Index Futures not only expands Eurex’s product offerings but also adds a new dimension to crypto trading, opening up opportunities for hedging and strategy optimization in a market known for its volatility.

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