BitExchange has introduced XRP-linked options on its cryptocurrency derivatives platform, enabling users to engage in XRP options trading without owning the cryptocurrency itself, as per the exchange's statement on August 17th.
The options trading will involve profit and loss settlements in US dollars. The exchange has collaborated with OrBit Markets to manage the order book liquidity for this new feature. BitExchange's options offering includes other cryptocurrencies like Bitcoin, Ether, Cardano, Ton coin (TON), and Milady (LADYS).
Options are financial derivatives that provide purchasers the right to buy or sell an underlying asset at a pre-determined price within a specified timeframe. Calls give the right to purchase, while puts allow the right to sell. Traders typically utilize op actions for risk mitigation, hedging, or generating additional income by selling options while holding them in the spot market.
Justin Buitendam, Head of Global Institutional Sales at BitExchange, expressed excitement about providing options trading on XRP for both institutional and retail traders. XRP, currently valued at around $30.88 billion, ranks as the fifth-largest cryptocurrency globally. Notably, XRP tends to exhibit higher volatility compared to Bitcoin and Ether. BitExchange's decision to launch XRP options coincides with a recent legal ruling that partly favored Ripple Labs, the issuer of XRP, in its ongoing dispute with the US Securities and Exchange Commission (SEC). The ruling specified that XRP is not considered a security when traded on centralized exchanges but may be regarded as a security when directly sold to institutions.
Following this ruling, multiple exchanges have reinstated XRP trading. In a more recent development, the SEC has sought permission to challenge the court's decision.
