LedgerX Announces Bitcoin Options Trading Upgrade
LedgerX announced Tuesday that it is launching a new simplified interface for a bitcoin call options trading platform.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/AKFQSFKOONDH3KDENIFDKHJ664.png)
Bitcoin derivatives platform LedgerX is launching a new, simplified interface that lets bitcoin investors earn interest on their holdings.
The new service, announced Tuesday, operates similarly to its existing bitcoin call options with a streamlined user face for investors, according to LedgerX president and chief risk officer Juthica Chou.
Chou explained:
Essentially, participants place a bet on what bitcoin's price will look like at some point in the future. If the price grows to that level within the time period, the participants recoup their investment. In the event that it doesn't, participants can sell their coins and receive fiat currency from the profit on that sale.
This is "by far the largest trade that we've seen people coming in to do," Chou said. "I would say that more than half our volume has been in this kind of trade."
"The contract that people are entering into here is such that they're selling an upside call option, so probably call it [two times] where bitcoin is now. If bitcoin tanks, they still collect the exact same premium and if bitcoin goes up then they end up selling bitcoin at about [two times]," she explained.
Chou added that "overall, I think the volatility is what impacts us ... the more [bitcoin's price] moves, the more fiat [investors] can collect."
Only eligible contract participants, as defined by the U.S. Commodity Futures Trading Commission, can trade in these call options, however. Users need to undergo "the same [know-your-customer] and application process as standard LedgerX" participants, said Chou.
She concluded:
Zach Dexter, Juthica Chou and Paul Chou image courtesy Juthica Chou
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.