Huobi exchange unveils plans to roll out BTC options trading

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Jul 15, 2020
  • The exchange aims to launch BTC options trading in Q3 this year.
  • Per Huobi, the decision to launch BTC options trading was market-driven.
  • Huobi is set to face competition from other leading firms in the derivatives sector.

Huobi, a leading Bitcoin futures and spot exchange aims to launch a Bitcoin options product before the end of Q2. A report, unveiled this news on July 12, noting that this offering would help bolster the exchange’s derivatives offering. Reportedly, the decision to introduce Bitcoin options was market-driven.

Commenting on this plan, Ciara Sun, Huobi’s VP of global markets said,

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“Our entry into the derivatives market has been incredibly successful. Huobi Futures has been sitting at the top of many metrics regarding trading volume, and has rocketed to the top in Perpetual Swaps in just a few months.”

Per Huobi, Bitcoin options are very similar to BTC futures. The only difference is that in BTC options, contract holders do not have to purchase the asset upon maturity. As such, a trader is free to exit the contract. However, they would have to pay a pre-decided premium.

Increasing demand for crypto derivatives

Huobi’s decision to launch this product comes as the market demand for Bitcoin options is peaking. While the firm is a big dog in the derivatives sector, it is set to face still competition from platforms such as Deribit, CME Group, and Binance.  For instance, In the past month, CME Group unveiled that its Bitcoin options demand surged 10x. While this is a success story for the firm, Deribit remains the industry’s leader as it controls 80% of the market.

According to Huobi, its BTC options product will be in European style. This means that the option’s buyer will only be exercised at expiration. The exchange added that it would only offer Bitcoin options for now. However, the firm did not disclose any plans for introducing other digital currencies.

The exchange further cited that,

“Huobi also offers incredibly low minimum positions of 0.001 BTC. This means that traders can open an Options position with around $10 compared to other exchanges where the minimum position can cost as much as 1 BTC.”

Reportedly, the contracts are still in the alpha testing phase. According to the exchange’s plans, Huobi Futures will announce the official launch of the product on Web and API.

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