The massive BitMex platform that facilitates so many cryptocurrency deals may be about to offer its own Bitcoin options to traders.
BitMex, a derivatives-only platform which has been crunching trade numbers since 2014, already handles around $1.1 billion in daily traded volume, and is considered the largest crypto exchange by reported volume.
In a recent interview with Venture Coinist Friday, BitMex co-founder and CEO Arthur Hayes talked about opening up a cryptocurrency options platform.
“We have someone who works with some university professors on a new and difficult way to do it,” Haynes said of a hopeful bid to start offering options through the exchange, according to reporting today in The Cryptocurrency Post.
Although Bitcoin options are legal and available on some exchanges, there hasn’t been a huge groundswell of activity in that region – BitMex will offer another high-profile alternative for this kind of trading, which The Cryptocurrency Post describes this way:
“Options are a type of derivative that gives the buyer the right — but not the obligation — to buy or sell an asset at an agreed price in the future. They are intended to serve as strategies for hedging, protecting or speculating in different market conditions.”
If options are so often used for hedging, the move to include them on BitMex might seem somewhat strange on its face, as Hayes predicts Bitcoin spiraling to $10,000 by the end of the year.
However, you don’t have to be a bear to use options trading – in analyzing options trading for bulls, an anonymous expert at OptionsTrading.org goes over various different plays:
“Each bullish trading strategy comes with its own unique characteristics, and you can select a strategy that is most likely to help you achieve whatever it is you are aiming for,” he/she writes before offering a list of assertive choices. “For example, you could use one that reduces the cost of buying calls by also writing calls with a higher strike. This could also help you reduce the negative effect of time decay on your position, something you could also do by using a strategy that involved the writing of puts.”
Are you interested in options? What about Bitcoin options? If you think you have a handle of where the market is going, an options play might be in order. If you want to get even fancier and hedge against loss, put an options play up against a buy and hold. Making your crypto portfolio positions more elaborate helps you to beat the volatility of assets that are prone to move quickly both up and down.