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Bakkt to Launch First Regulated Options Contract for Bitcoin On December 9 

The subsidiary of Intercontinental Exchange (ICE), Bakkt, will be launching the first regulated option contract for bitcoin futures on December 9. 

According to an official announcement made by CEO Kelly Loeffler on Medium today, the development is one of the many physically-settled bitcoin futures products that the firm is currently working on for regulated markets. 

The move is coming after persistent users’ requests on the need to develop a bitcoin options contract for institutional investors, their customers, and other investors.  

“ICE Futures U.S. has self-certified the contract with the CFTC, and we’re excited to leverage the benchmark futures prices and institutional-grade custody to meet the needs for a regulated options contract,” the post reads.  

The Bakkt’s bitcoin option contract will consist of eight features, such as capital efficiency, cash or physical settlement, European style option, low fees, as well as instant messaging, block trades, and options analytics, the announcement notes. 

“The Bakkt Bitcoin Options contract will be based on the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors,” Loeffler added.

Since Bakkt launched its futures contract a month ago, the firm recorded low sales at the initial stage, but sales soared higher yesterday, with the firm making a record of 590 transactions on a single day. 

The news will see Bakkt join CME Group in the launch of bitcoin options. It can be recalled that the CME group had announced that its bitcoin options would go live in Q1 2020. 

Bakkt stated that since its bitcoin future contract went live, it has worked closely with market participants building liquidity, create market transparency, and build open interest.  

As reported last month, Bakkt stated that persistent clients’ demand led the exchange to launch its physically-delivered bitcoin futures products for institutional investors who want to get exposure to the emerging asset class.

At the time of the launch, Bakkt Chief Operating Officer (COO) Adam White stated that the new products would improve price discovery for bitcoin.

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