Derivatives Exchange Deribit Launches Daily Ether Options

Panama-based cryptocurrency derivatives exchange Deribit has listed daily options on ether.

From Feb. 19, the exchange will also be reducing the tick size for all ether options from the current 0.001 ETH to 0.0005 ETH, Deribit CMO Andras Caron said.

Options are derivative contracts based on the value of the underlying instrument.

Deribit launched longer duration cash-settled options on ether at the end of March 2019.

The exchange has traded an average daily volume of $1.9 million, according to Skew Markets.

Volumes have risen sharply on the exchange this year with the increased price activity in the ether market.

The derivative space has heated up over the past few months with big names like Chicago Mercantile Exchange and Intercontinental Exchange's Bakkt launching options on bitcoin.

Deribit is still the leader when it comes to options volume.

As of Jan. 28, Deribit accounted for nearly 90 percent of the global volume, according to Skew.The latest decision to launch daily ETH options comes two weeks after daily bitcoin options went live, and could attract more users for the exchange, particularly from day traders.

"Daily options only have one or two days remaining lifetime and thus lower time value or premium and thus [are] cheaper. These shorter-dated, cheaper options are great instruments to use for short term strategies enabling the trader to hedge events or benefit from expected short term moves," said Caron.