The New York-based institutional trading and clearing platform for crypto coins , which was the first U.S. exchange to receive license from the Commodity Futures Trading Commission (CFTC) to clear and settle derivative contracts for cryptocurrencies, has created a line of Ethereum (ETH) options and is set to launch them once it gets a green light from regulators.
Although LedgerX is yet to release an official statement regarding the news, the report cites a source privy to the company that said the launch could occur on the 5th of October – after a CFTC meeting – if regulators at the agency are completely satisfied with the product.
LedgerX started offering bitcoin subsidiaries in October last year, about 60 days before CME and CBOE rolled out their Bitcoin futures contracts. Right now, the firm offers one-day swaps, which are basically one-day future contracts and options, which grant merchants the privilege to buy or sell a particular asset, at a specific cost, at a specific time in the future. Now, it wants to make these options available for ETH too.
These options would enable investors to short the Ethereum price, creating what is referred to as a two-sided network for the world’s second-largest digital coin by market capitalization. While ethereum derivatives may contribute to short-term price drops – some studies have associated the current year’s digital money market decline to the rollout of the first regulated bitcoin futures/swaps.
Cryptocurrency miners and professional investors can likewise hedge with options to minimize the risk related to price volatility.
Should LedgerX bring an Ethereum product to the crypto market, it likely won’t take long before CBOE — which is on record expressing its wish to include more digital currency products — lists ETH futures contract too. As CCN revealed, CME has unveiled an ether price index but has remained tight-lipped on its future plans for the cryptocurrency.