Crypto options trading

The function enables users to speculate on future prices of cryptos and settle their trades using USDC.

Singapore-based crypto exchange Bybit has recently announced its service expansion into crypto options trading, allowing users to trade USD Coin (USDC) options and perpetuals. 

The Bybit media team told Cointelegraph that this decision to add options to the product line was in response to its community’s demands. Bybit noted that investors want to trade options because it can “serve as a hedge against existing risks and provide greater market exposure.” It also gives traders a way to diversify their portfolios.

The newly-launched crypto options contracts on the exchange work on the same principles as its traditional finance counterparts. It allows users to speculate on the future price in the United States dollar value of an asset and settle trades using USDC. The Bybit team noted that “options contracts are rights not obligations, so they will expire without a transaction if the option is not exercised.”

While options targets experienced traders like institutional clients and market makers, Bybit also believes that it’s possible for it to drive adoption among traditional finance traders. The team said that:

“The broadening range of products and services denominated in cryptocurrencies helps investors who are more familiar with traditional money.”

While the service allows Bybit users who passed their Know Your Customer (KYC) process to trade options, the platform excluded jurisdictions including the United States, mainland China, Singapore, Quebec, Canada and North Korea.

Related: Here's how Ether options traders could prepare for the proof-of-stake migration

In March, foreign exchange firm CME Group revealed plans to introduce micro-sized Bitcoin (BTC) and Ether (ETH) options. Before the month ended, the group rolled out options contracts for the existing micro BTC and ETH futures.

As investing in crypto starts to become more regulated, more institutions are looking to enter the market. In a Cointelegraph interview, NEAR Foundation CEO Marieke Flament said that there is a “very strong appetite” from institutional players to try and understand how they can participate and enter the crypto ecosystem.