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As traders seek strategic, short-term exposure to digital assets, crypto derivatives markets are gaining in popularity.
Delta Exchange, a cryptocurrency derivatives platform, announced Wednesday that it has begun futures trading on Solana (SOL) and Cardano (ADA), providing investors with a new access point to the biggest cryptocurrencies.
The initial release of SOL and ADA call and put options will have daily maturities, with weekly and monthly maturities coming subsequently.
Options give owners the right, but not the obligation, to buy or sell a specific security at a specified price within a pre-defined timeframe. Call and put options are used heavily in traditional markets but have become more prevalent within crypto markets.
Delta Exchange already allows you to trade options on Bitcoin (BTC), Ether (ETH), XRP (XRP), Bitcashpay (BCP), and Binance Coin (BNB). According to Cointelegraph, the derivatives exchange will debut multiple options products in mid-2020.
This year has seen an exponential growth in the crypto derivatives sector, with traders defying global financial regulators’ regulatory crackdown. Binance, a cryptocurrency exchange, recently announced that it would ban derivatives trading for Hong Kong consumers due to local constraints. Officials at the Commodity Futures Trading Commission in the United States have expressed support for wider enforcement of crypto-based derivatives.
Following a pause in the middle of the summer, options trading increased considerably in August as crypto markets staged a big rebound. Open interest in Bitcoin options had more than doubled since their yearly low in late June by mid-August.
According to CoinMarketCap research, derivatives will account for 55% of the whole cryptocurrency market by December 2020. The expansion of platforms such as FTX, Bybit, and Delta suggests that derivatives may account for a larger share of the overall market.