Deribit, cryptocurrency derivatives exchange located in Panama, has listed daily ether (ETH) options.
The platform announced in a tweet that the new product will have $5 strike price intervals and can be traded daily at 08:00 UTC within the 24 hours preceding the expiry. At the time of introduction, they’ll have two trading days for life.
Deribit CMO Andras Caron said that the exchange will also reduce the tick size from the current 0.001 ETH to 0.0005 ETH for all the ether options starting Wednesday, Feb19.
Options are derivative contracts, based on the underlying instrument’s value. A call option (bullish bet) gives the buyer the right, but not the duty to purchase the asset on or before the agreed date, at a certain price.
Meanwhile, the right to sell is represented by a put option (bearish bet).
ETH Options Follow Bitcoin’s
The decision to launch daily ETH options comes two weeks after daily bitcoin options went live, and may draw more users, particularly from day traders, to the exchange.
“Daily options only have one or two days remaining lifetime and thus lower time value or premium and thus [are] cheaper. These shorter-dated, cheaper options are great instruments to use for short term strategies enabling the trader to hedge events or benefit from expected short term moves,” added Caron.
At the end of March 2019, Deribit released cash-settled options on ether for longer duration. According to Skew Markets, the exchange has since traded an average daily volume of $1.9 million.
Traded volumes on the exchange witnessed a sharp rise this year, with increased price activity on the ether market. Notably, a record $13 million dollar one-day volume was recorded on Feb. 13. Recently, the cryptocurrency has risen to a seven-month high of $290 and this year has gained nearly 100 percent.
Over the last few months, the derivative space has been heating up with big names including Chicago Mercantile Exchange (CME) and the Bakkt launch options on bitcoin (BTC) from Intercontinental Exchange.
But Deribit is still the leader when it comes to volume of options. As of January 28, according to Skew, Deribit accounted for nearly 90 percent of the global value.