The U.S Commodity Futures Trading Commission announced yesterday that it has granted LedgerX registration as a derivatives clearing organization under the Commodity Exchange Act.
Under this order, LedgerX will be authorized to provide clearing services for fully collateralized digital currency swaps.
The entire release can be read here:
http://www.cftc.gov/PressRoom/PressReleases/pr7592-17
This marks the final hurdle for LedgerX to begin trading options contracts.
They were initially granted an order of registration as a Swap Execution Facility on July 6, 2017.
I wrote about that originally here:
https://steemit.com/cryptocurrency/@jrcornel/wanna-trade-bitcoin-options-we-just-got-one-step-closer
LedgerX said that they plan to offer options contracts initially in the one to six month time frames. At first they will be primarily based around Bitcoin.
From there, there are plans to expand the virtual currency base to include Ethereum as well as a couple others.
Also, longer dated options are expected to be added as well as the platform matures.
Options will start to be offered in the late September to early October time frame.
It likely paves the way for large institutional investors to get involved in Bitcoin and possibly some of the other virtual currencies.
Given the volatility of the cryptocurrency markets, it has been a tough sell to get major financial institutions involved. However, now that options are an "option" it allows them to greatly mitigate some of the volatility via hedging.
It also allows for speculators to take on even more volatility should they so choose.
On the flip side, it will also make it easier to make bets against the virtual currency space. There is always the chance in smaller markets like these that large players make big options bets and then manipulate the markets to move in the direction of their bets.
Buying large amounts of puts and then spreading fud is one option that likely will be tried at some point.
Overall though, I think this is great news for Bitcoin and the entire space. Anytime we can add more would be investors, speculators, and traders the better off we will be.
In my opinion this is going to increase the investor base, possibly pretty substantially.
Stay informed my friends!
Sources:
http://www.cftc.gov/PressRoom/PressReleases/pr7592-17
https://www.bloomberg.com/news/articles/2017-07-24/bitcoin-options-to-become-available-in-fall-after-cftc-approval
Image Sources:
http://www.wallpaperup.com/678752/BITCOIN_computer_internet_money_coins_poster_binary_code.html
http://www.zerohedge.com/news/2017-07-08/cftc-approves-options-trading-bitcoin
https://www.bitcoingg.com/bitcoin-gambling/binary-options/
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