Huobi Futures, the derivatives platform of the popular cryptocurrency exchange Huobi Group, will launch Bitcoin options trading starting September 1st.
The company explained that more sophisticated investors are entering the digital asset market, and their BTC options release aims to meet their demand.
Announced earlier today, the Singapore-based platform plans to release Bitcoin options traded against USDT on September 1st at 10:00 UTC. The new product will be offered in “increments of weekly, bi-weekly, and quarterly options.”
According to the company, Bitcoin options trading is the logical next step following the roll-out of Huobi Futures’ Perpetual Swaps earlier this year. Although the platform will initially support only BTC options, it plans to add other digital assets soon as well.
Bitcoin options on Huobi’s platform will work similarly to options in the traditional financial markets. It’s a derivate product enabling users the right, but not the obligation, to buy or sell BTC at an agreed-upon price and date.
Call options allow the buyer the opportunity to buy the underlying asset at a specified price on the expiration date. Put options give him the right to sell a pre-determined amount of that asset at a specified price on the expiration date.
The announcement highlighted that the cryptocurrency market is continuously developing, which allures more institutional and sophisticated investors into joining. As such, the company believes that it has to be prepared to cope with the growing demand.
Huobi outlined that cryptocurrency derivatives trading volume has surged across most platforms since the start of 2020 and is “now outpacing that of spot trading.”
Adding options trading can lower the risk “as the maximum loss an options holder can incur is the options Premium, with no limit on gains.” When combined with other trading strategies, options can help investors hedge against extreme market volatility risks.
“Financial instruments like options don’t guarantee profits, but they do provide traders with greater flexibility and more opportunities. More importantly, we’re giving users access to an options product backed by the security and reliability they’ve come to expect from a global exchange like Huobi.” – commented Ciara Sun, Vice President of Global Business at Huobi Group.