September 1, 2020
Huobi Global’s derivatives wing – Huobi Futures – schemes to launch its crypto options on September 1, 2020, as an announcement confirms. These new crypto options will join a host of exciting and high liquidity trading derivative products on Huobi futures, counting everlasting futures and swaps.
As per the statement, Huobi Futures will give European styled call and place Bitcoin (BTC) options, thus permitting users to place stakes on the top crypto asset’s future price.
Huobi Futures states the latest move offers to improve the derivatives market for both its individual and established savers. Huobi’s BTC options will be settled in Tether stablecoin, USDt, having a minimum contract size set at 0.001 BTC, approximately $114 at present.
This exchange will give three short-term option contracts, such as weekly, bi-weekly, and quarterly options, which will be delivered every Friday intended as in-the-money options.
First USDt-quoted Options of Huobi
Huobi offers the pioneer USDt-quoted option prices, unlike the opposite options offered on rival product exchanges OKEx and Deribit. This is expected to keep the price unchanging likened to the BTC-quoted options values. The statement says,
The exchange aims to shake the options market by targeting retail customers – the BTC/USDt options have a face value of 0.001 BTC. Also, unmatchable security is what a leading team of options experts, a sturdy management system, and a fraud-detection system are what they’re aiming for.
Huobi BTC options; an understanding
To exercise the contract or not, an option works similarly to futures contracts but allows the agreement owner an “option.” A European call option limits the buyer’s contract to exercising the agreement only on the expiration date and not earlier.
European options offer the trader the right to sell an asset at the expiration date, without obligation. In contrast, call options provide the buyer a right to buy purchase at a predefined time.
As it provides a hedging opportunity, multiple profit-maximizing strategies, less risk, and cost efficiency, options trading is more favorable to spot trading.
Huobi’s BTC price directory will be derivative from five top crypto exchanges with an identical allowance. The five exchanges consist of Huobi, Binance, OKEx, Poloniex, and HitBTC.
According to Skew Markets, Huobi Futures’ options will compete with obligatory companies in the options market such as Deribit, who controls 78% of the daily options trading volumes.