Options trading will be available on OKEx starting from December 27, 2019.

With the launch of options trading, OKEx becomes the first crypto exchange to offer crypto-to-crypto (C2C), spot, futures, perpetual swap, and options trading under one roof.

Options trading will go live on December 27. However, simulated trading in the options product has already commenced from December 12, 2019.

Features of the OKEx options product

OKEx assures that it will take place feeds from multiple exchanges. This will ensure that the pricing of its options is representative of the entire market.

“Pricing is based on the Black-Scholes model and [the] entire market — not just one Bitcoin quote from one exchange,” said Enzo Villani, head of international strategy and innovation. Therefore, the options product is backed by a system to prevent manipulation of close prices. OKEx averages only spot data from multiple platforms to calculate a fair settlement price. Moreover, the exchange does this in real-time.

The options are based on underlying cryptocurrency indexes. For example, for the BTC/USD index, options features are:

• Call and put options contracts
• Weekly, biweekly and quarterly expirations
• 1 contract multiplier and 0.0005 BTC tick size
• European exercise and settlement into Bitcoin

“OKEx Options will offer both buy and write options, which enhances trade flexibility and market transparency with trade prices that closely reflect market trends,” the firm said in a statement. “OKEx’s version is, therefore, a major improvement upon other platforms that only support buy options.”

“We aim to provide the broadest range of trading and risk management tools to all our clients from institutional to retail market participants,” said Jay Hao, CEO of OKEx. “OKEx Options is a unique instrument that enables traders to manage, price and hedge the volatility of crypto assets with a combination of options contracts.”

However, speaking to Benzinga, Villani said:  “We’re still in the early days. Adding the options market allows people to trade something that they’re used to.”

Meanwhile, the Intercontinental Exchange’s Bakkt has gone live with its bitcoin options and cash-settled futures contracts from December 9.

[Related Story: CME Group to Launch Bitcoin Options In 2020  ]