The Intercontinental Exchange (ICE) is launching bitcoin options contracts through its subsidiary Bakkt.
Bakkt announced Thursday that it would “launch the first regulated options contract for bitcoin futures,” adding a new product to its current slate of physically-settled bitcoin futures contracts. CEO Kelly Loeffler said in a Medium post that the contracts were built in response to customer feedback, and ICE Futures US self-certified the contract through the U.S. Commodity Futures Trading Commission (CFTC), according to the post.
“We’re committed to bringing trust and utility to digital assets and the options contract is an example of the many products we’re developing for regulated markets,” she wrote. “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.”
Notably, the options contracts can be settled with cash, meaning customers receive the fiat equivalent to the contract’s value at expiration, or physically, meaning they receive the actual bitcoin.
When Bakkt initially launched its bitcoin futures contract a month ago, the company saw low trading volume. However, it appears to have picked up in recent days.
“We’ve 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.”
Kelly Loeffler image via CoinDesk archives