US stock exchange plans for derivatives trading with crypto currencies

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The Chicago Board Options Exchange (CBOE) has entered into a partnership with the Gemini Bitcoin exchange to enable derivatives trading with cryptic derivatives in the future.

To enable CBOE to launch its derivative trading business, it would like to take advantage of the Gemini data, which has been active on the cryptic market since 2015. The CBOE itself wants to start as soon as possible, ideally in this year, with cryptoderivates.

A comprehensible consideration, finally, derivatives would significantly expand the possibilities in crypto-commerce and thus attract a great deal of capital. Financial products with the underlying value of a digital currency could be used to drive hedge strategies, for example, by purchasing short certificates that hedge the portfolio in bearish market phases and reduce volatility. An option that would attract mainly institutional investors.

In addition, however, derivatives can also be used to enable leverage constructions so that the already high volatility would increase further. As a matter of principle, derivative constructions can represent practically everything that is mathematically representable and regulatory-permissible – the imagination is hardly limited.

Accordingly, it is important to wait and see if and when a licensing is issued for the CBOE. If this is the case, then this could significantly increase the inflow of funds in cryptic diseases. Thus, it is conceivable that other certifi- cate exchanges and financial service providers will also try to take the new investment class of cryptosciences into their derivatives portfolio and develop corresponding products.

In any case, the chances are not bad for the CBOE, since last week the clearing and trading platform LedgerX has already received permission from the Commodities Futures Trading Commission to settle and retain cryptic derivatives.