XRP is listed on another exchange after winning from SEC.
BIT crypto exchange has listed XRP options as part of its crypto derivatives platform to leverage XRP’s increasingly positive sentiment after the July 13 partial win against the Securities and Exchanges Commission (SEC). With this news update, users can now trade XRP options without holding the underlying asset.
The crypto exchange said in a press release that XRP became its sixth addition to a range of crypto option products comprising Bitcoin, Ethereum, Cardano, Toncoin, and Milady.
According to the Aug 17 PR, BIT partnered with OrBit Markets to enable the settlement of profit or loss in U.S. dollars. OrBit Markets is an institutional liquidity provider (LP) offering structured derivatives and digital asset options. For this reason, BIT believes the firm will create order book liquidity, manage portfolio risks, and hedge accordingly using a combination of tested strategies.
Options are derivative agreements where two parties enter into a contract for buying or selling a specified asset on a specific date and at a pre-determined price. When the date arrives, the person holding the option’s position can either sell or buy the asset at the pre-determined price; however, they are not under any obligation. There are two types of options, a put option, and a call option. The put option grants rights of vending, while the latter grants rights of purchase.
Typically, traders prefer to hedge assets using options so as to minimize risks that come with both bear/bull markets. Other times, crypto options come in handy when generating passive income from writing options on top of a spot market position.
In a statement by Justin Buitendam, BIT’s Global Head of Institutional Sales, BIT is among the first exchanges to make XRP options accessible to retail and institutional traders.
“This has enabled long and short for crypto options traders who want XRP, and at the same time allowed users to trade XRP options without holding the asset.”
Furthermore, the exchange also stated they would offer a unified margin system to support collateralized trading of assets in one’s account.
The last month has seen crypto exchanges rampage to either list or re-list Ripple’s XRP token following the U.S. Federal court’s rule in favor of Ripple in a case against the SEC. After last month’s court win, Coinbase was among the first exchanges to announce the re-listing of XRP even after it delisted the token on DEC 28, 2020, on the grounds of an ongoing court battle with the Securities and Exchanges Commission.