- Binance has launched ETH and XRP options contracts
- Binance is now the first exchange to add support for XRP’s options contracts
- Choice of trading options will depend on trader preference
Cryptocurrency News Today – two new cryptocurrency options contracts have been listed by Binance exchange. The world’s biggest digital currency exchange, Binance, has announced the addition of options contracts for XRP and Ethereum. By doing this Binance has become, the first exchange to list the XRP options contract on its platform.
Options contracts are known as financial derivatives designed to leverage and allow buyers (of the contracts) to purchase (call option) or sell off (put option) their underlying asset. These transactions can be conducted at a specified price once they expire.
Derbit Exchange Led When it Comes to ETH Options Until Now
Until the report of Binance listing, Deribit exchange was the leading cryptocurrency trading platform for Ether options contracts. It was also leading the cryptocurrency space for Bitcoin options contracts as well with a whopping 75% market share. On the average the Open Interest for Ether options on Deribit exchange since it’s launch in May of last year is $39 million. It is now at an ATH concerning the number of ETH.
Now, Binance is looking to dominate that capacity in the market as well. The addition of XRP options will up the ante on cryptocurrency speculations. BitMEX exchange was one of the first derivatives exchanges to offer XRP futures back in February. Apart from BitMEX, Binance, Okex, Poloniex, and a few exchanges who have done this as well. Binance is now one of few exchanges to offer futures contracts for multiple digital currencies.
Choice of Trading Options Will Depend on Trader Preference
The news of options contracts listed on Binance comes with many benefits. One of the major ones is the reduction of risks in options contracts. According to the report, while there will be a reduced risk level when it comes to options contracts when it comes to trading futures or options contracts, this will depend on the preference of the trader involved.
In addition to this, the premium placed on the price of options contracts can serve as a robust indicator of the market sentiment. However, it can also bring about more volatility in digital asset prices. Of course, the report about listing support for Ethereum and XRP should positively impact their market values in the coming days. But considering the state of the global economy and the digital asset market this may not be the case as crypto prices continue to struggle since the coronavirus outbreak began.