According to the announcement, BitExchange became one of the first "platforms offering XRP options trading to institutional and retail traders."
BitExchange has rolled out options trading linked to XRP. This strategic launch ensures that traders can partake in XRP options without the requirement of directly holding the cryptocurrency.
Options trading typically serves as a powerful tool for traders, offering the flexibility to buy or sell an underlying asset at a set price before a defined date. Specifically, call options allow traders to buy, whereas put options come with the selling privilege.
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These derivatives often aid traders in managing risks, hedging against potential price fluctuations, and even deriving additional income by “writing” options to complement their spot market positions.
Justin Buitendam, the Global Head of Institutional Sales at BIT, shared his excitement about the newest venture by noting:
We're excited to be among the early platforms offering XRP options trading to institutional and retail traders, providing both long and short options trading opportunities.
The move by BitExchange isn't just about variety. XRP, boasting a market cap of $30.88 billion, currently stands as the fifth-largest cryptocurrency in terms of market capitalization. Though its price movements can be more volatile than leading cryptos like Bitcoin (BTC) and Ether (ETH), this inherent volatility brings lucrative trading opportunities.
Enhancing its cryptocurrency derivatives platform, BitExchange confirmed that the profit and loss settlement for these options would be in US dollars. Additionally, OrBit Markets is set to manage the order book liquidity.
This XRP addition is in line with the crypto exchange’s suite of offerings which already encompasses popular digital assets such as Bitcoin, Ether, Cardano (ADA), Toncoin (TON), and Milady (LADYS).
BitExchange's decision to embrace XRP options comes in the wake of pivotal legal deliberations. A landmark decision was made when a US District Court tackled the US SEC's allegations against Ripple Labs, accusing them of violating securities laws through XRP sales. In a significant verdict, the court determined that while XRP isn't a security on centralized platforms, it could be seen as such when sold directly to institutions.
Given this backdrop, the crypto community has seen multiple crypto exchanges resume XRP's spot market trading. However, the regulatory environment remains tense as the SEC recently expressed its intent to contest the court's verdict, thus casting a cloud of uncertainty over the future of XRP and the broader market.
