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Bakkt announces plan to launch options on its bitcoin futures on December 09

Fri, 25 Oct 2019, 07:06 am UTC

Intercontinental Exchange's (ICE) crypto platform Bakkt has announced that it will launch options contract for bitcoin futures on December 09.

CEO Kelly Loeffler made the announcement in an online post on Medium. She said that the launch is driven by customer feedback, adding that the bitcoin options contracts have been designed to “hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies.”

“The Bakkt Bitcoin Options contract will be based on the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors, their customers and investors,” Loeffler said.

As per the details, ICE Futures U.S. has self-certified the contract with the U.S. Commodity Futures Trading Commission (CFTC).

Customers can choose for either cash or physical settlement. In case of options contracts settled with cash, they will receive the fiat equivalent to the contract’s value upon expiry, while they will receive actual bitcoin if they opt for physical settlement, CoinDesk reported.

Bakkt went live with its bitcoin futures contract only last month after overcoming a number of regulatory hurdles.

Since the launch, Loeffler said that they have been “working closely with market participants to build liquidity, create market transparency and build open interest. Notably, we saw a record 590 contracts of Bakkt Bitcoin Monthly Futures change hands yesterday, October 23. We also completed a milestone with seamless physical deliveries in both our daily and monthly bitcoin futures contracts.”

Bakkt’s plan to launch regulated options contract for bitcoin futures follows a recent announcement from CME to launch options on its bitcoin futures contracts in the first quarter of 2020.

Citing a letter addressed to the CFTC, CoinDesk reported that Bakkt is also launching a market maker program in order to boost the trading of its monthly contract.

“The Exchange believes the new Program will incentivize additional liquidity and volume in the new Bakkt Bitcoin (USD) Monthly Futures Contract,” the letter states.

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