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Options on BlackRock's popular iShares Bitcoin Trust ETF (IBIT) began trading on the Nasdaq on Tuesday, providing a new way to trade and speculate on Bitcoin prices.
IBIT traded 73,000 options contracts in the first 60 minutes of trading on Tuesday, putting the fund among the top 20 most active non-index options, Nasdaq told CNBC.
Investors can play with options trading Bitcoin's It avoids the notorious volatility by allowing you to buy and sell assets at predetermined prices based on whether the price is expected to rise or fall within a certain period of time.
Noel Acheson, an economist and author of the newsletter Crypto is Macro Now, said: “Bitcoin has an active derivatives market, but it is still small compared to other asset classes in the US and is primarily institutional. It is limited to investors.” “The deepening of the onshore derivatives market will enhance the sophistication of the growing market. It will be introduced… [That] All else being equal, it should dampen both volatility and downside. ”
The market for options contracts on major ETFs can be very active and is widely used by more sophisticated traders. For example, in the past 5 business days, Interactive Brokers customers have had more option orders. Invesco QQQ Trust (QQQ) and SDPR S&P 500 ETF Trust (SPY) than the fund itself, according to brokerage data.
Todd Thorne, ETF strategist at Strategas, said the launch of Bitcoin ETF options will likely lead to new funds incorporating those options.
“Grayscale has already filed for a covered call. [fund]and I'm sure BlackRock will bring it out as well. And then we're going to get buffers and then we're going to get other trend-following strategies that people think of. I think this is where the ecosystem really starts to move,” Song said.
