In an announcement on June 19, the exchange indicated it would be following the launch of its options for BNB and LINK with similar contracts for Tezos (XTZ), Atomic Coin (ATOM), XRP and Litecoin (LTC).
Delta’s CEO Pankaj Balani told Cointelegraph that BNB and LINK are two of the most active coins on the exchange and that the launch of the new contracts was in response to “a lot of inbound interest from traders.”
Delta’s approach to crypto options trading
As reported, conventional options are tradable derivative contracts that allow market participants to purchase either a right to buy (a call option) or sell (a put option) a given asset at a specified “strike price.” This strike price is determined on or before the contract’s expiration date.
Options therefore provide exposure factors that include “moneyness” (the asset’s current price vs. the strike price), time to expiry and implied volatility.
In the case of Delta’s Move contracts, these have been designed to enable market participants to specifically trade volatility in digital assets, “without taking any directional risk,” in the Balani’s words. He explained that:
“When trading these contracts, a trader is betting on the absolute value of the price movement of a coin rather than the coin going up or down.”
As Balani previously elaborated in an interview with Cointelegraph, the contract is essentially a call and a put option bundled together, and is therefore intended to make it simpler to understand for non-professional (retail) traders.
In line with the fees it currently charges for ETH and BTC Move contracts, the exchange will be taking a 0.05% rate on the contract.
The BNB and LINK weekly contracts, and provide up to 10x leverage.
Strong precedent for crypto options in the industry
Balani said that Delta has been seeing close to $4 million worth trading on BTC Move contracts and about $2 million in ETH Move contracts on a daily basis.
This January, Chicago Mercantile Exchange (CME) Group launched Bitcoin futures options, following the Intercontinental Exchange (ICE)’s digital asset platform Bakkt launch of the first regulated BTC options in the United States.