[ad_1]
Move, an options contract that tracks Bitcoin (BTC) daily volatility, recently saw a 30-day trade volume increase by 25% on the crypto derivatives platform, Delta Exchange.
According to an announcement Delta Exchange sent to Cointelegraph on April 16, Move contracts worth $ 8 million have been traded on the platform in the past 30 days. The platform also observed an additional $ 1 million worth of Ether (ETH) volatility monitoring contracts traded during the same time period. Exchange CEO Pankaj Balani said:
“While the first 2 weeks of March saw BTC MOVE contract trading for just over 1 million, this number has been close to 2.5 million in the past 2 weeks. Since then, although volatility has subsided, the volumes of MOVE contracts are still high and for the month of April, over 4 million MOVE contracts have already been traded. We are seeing similar trends also for the ETH MOVE product “.
High volatility environments push for higher volumes
According to Delta Exchange, this represents a 25% increase in trading volume for contracts. Balani explained why he believes traders are showing increased interest in options:
“Traders are taking advantage of the high volatility environment and selling options. We saw strong sales of these products after Black Thursday when volatility increased up to 250%. […] We are in a highly volatile environment “.
The CEO pointed out that Bitcoin’s volatility was around 40% -50% prior to the recent crash. After the collapse ended, volatility increased fivefold. He concluded that now that volatility has declined again, contracts have once again become buyer dominated.
Balani said there are always two Move contracts for Bitcoin and two for Ether. One tracks the volatility of the current day and the next day and the second starts trading when the current contract expires. Traders can set limit orders for the next day’s contract before the match begins. He said:
“Early contract listing gives traders the opportunity to roll over their positions from the current day to the next day just as the contract is launched.”
Balani explained that the contract is just a bundled call and put option. The contract is intended to make options trading easier for retail traders, he continued:
“Trading a MOVE contract is like trading a futures contract on the absolute movement of the price of BTC or ETH. Traders are quite familiar with how futures trading works and therefore find MOVE contract trading much easier than individual options trading. “
Bitcoin options on the rise
As Cointelegraph explained in a dedicated article, an option is a type of negotiable derivative contract that allows the owner to buy or sell at a specified price by the expiration date. Contracts of this type provide exposure factors including profitability (current asset price versus strike price), expiry time and implied volatility.
Recently, Binance officially launched Bitcoin options on its futures platform, although for now they are only available through its mobile app.
