Cryptocurrency Derivatives Series: LedgerX Launches Bitcoin Call Options of Deep OTM Strikes and Far-Month Tenors

The US-regulated exchange and clearinghouse LedgerX, with former CFTC commissioner Mark Wetjen on its board of directors, was the first to gain approval and is expected to offer both physically-settled options and futures of the underlying security, bitcoin. Despite the exchange's established presence serving institutional traders, these new products are to be aimed primarily at retail as part of a platform called Omni.

On the back of above development, LedgerX has unveiled a call option of the underlying security, ‘Bitcoin’ for the bullish risk anticipation, with OTM strikes of $100,000 and expiry date as December 2020.

Any retail or institutional investor can either utilize put or the call option on the exercise price of the pioneer cryptocurrency. One can fetch 10x times payoffs from the spot price of BTCUSD when the underlying price hit the strike price, constituting bitcoin a $2 trillion market cap, as per the Bloomberg report on July 17th.

LedgerX happens to be the 1st federally regulated exchange and clearinghouse to list and clear fully-collateralized, physically-settled bitcoin swaps and options for the institutional market. The U.S. Commodity Futures Trading Commission (CFTC), which regulates virtual currency derivatives, oversees LedgerX's registration as a swap execution facility (SEF) and derivatives clearing organization (DCO). The LedgerX management team comprises of Goldman Sachs, MIT, and CFTC alumni, who bring financial expertise, technical talent and regulatory experience to the firm.