options give the buyer of a call or put the right to buyor sell one Bitcoin futures contract at a specified strike price at a future date.
In-the-money options, expire into 1 Bitcoin futures contract which immediately cash settles to the CME CF Bitcoin Reference Rate (BRR
). The options will have a tick size of $5 per BTC; with the contracts being 5 BTC, they will move in increments of $25. See image below for preiminary contract specifications.
In the sa
me way that regulated Bitcoin futures
expanded the possibilities for traders, regulated Bitcoin options
will open up a variety of new trading strategies and opportunities as well, in turn bringing less volatility
to this asset class and making a case for allocation in multi asset portfolios. “Derivative products introduce Bitcoin to a broader base of investors that hold vastly more wealth than individual or retail investors.” –Brian Armsrong.