Erica Flores

Market Slump puts crypto derivatives in the spotlight

As volatility returns to cryptocurrency markets, with severe losses during the last week, exchanges of digital assets and other financial technology platforms have returned their attention to crypto derivatives. Instruments such as bitcoin futures contracts can help traders protect themselves against risks and even benefit from each price.

Also read: Rules of registration of the Isle of Man updates for cryptocurrency companies

Huobi launches crypto derivatives market

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Singapore-based digital asset exchange Huobi has Announced The beta launch of its cryptocurrency derivatives trading platform. The Huobi Derivatives Market (Huobi DM) allows users to benefit from the increase and each of the cryptocurrency prices by opening long or short positions.

According to a publication on the Huobi website, the new platform begins with BTC contracts denominated in US dollars, with the corresponding cryptocurrency as margin. The settlement of losses and gains will be made in the digital currency.

Huobi further explains that each contract represents a certain amount of cryptocurrency. "The nominal value of a BTC contract is $ 100 and the minimum price change in order adds up to $ 0.01," the announcement details. The nominal value of other contractual varieties will be $ 10, and the minimum price change in the order will be added to $ 0.001.

Huobi DM offers weekly and biweekly contracts that are resolved on Fridays, March, September and December. Users must select leverage; the available options are 1x, 5x, 10x and 20x. All contracts must use the same leverage and cannot be changed when there are still open positions or pending orders.

Okex reminds traders about their futures contracts

<img class = "alignright wp-image-249493 size-medium" title = "Market Slump puts crypto derivatives in the spotlight" src = " 2018/11 / shutterstock_787167748-300×206.jpg "srcset ="×206.jpg 300w, https: // wp-content / uploads / 2018/11 / shutterstock_787167748-768×528.jpg 768w,×70 jpg 100w, https: // news.×150.jpg 218w, shutterstock_787167748-436×300.jpg 436w, https: //×478.jpg 696w, 2018/11 / shutterstock_787167748-611×420.jpg 611w, 1000w "alt =" Market Slump puts d wandering cryptographic in focus ” width=” 300 ” height=” 206 “/>In a post published this week under the title "Introduction to the Futures Contract", the Okex encryption exchange discussed crypto derivatives. The Hong Kong-based trading platform offers users futures contracts for several cryptocurrencies: BCH, BTC, BTG, LTC, ETH, ETC, XRP and EOS.

Contracts are settled by BTC and their value is calculated in equivalent US dollars. Each contract represents $ 100 of BTC or $ 10 of other cryptocurrencies. The minimum price ranges are 0.01 points for BTC / BTG and 0.001 points for LTC and other digital assets.

The contracts expire weekly, biweekly and quarterly and the delivery period is Friday of the expiration week. The settlement date is the same as the delivery date and the settlements are made in digital currencies. The leverage options available are 10x or 20x.

Okex launched the BCH, ETH and ETC futures about a year ago. To a degree that surprised operators, the platform changed the terms of $ 135 million of BCH derivatives due to the recent fork of Bitcoin Cash, according to Bloomberg. On November 14, Okex delivered all BCH contracts according to the last negotiated price at 9:05 a.m. (CET) The exchange attributed its decision to high volatility in BCH's spot and futures markets. He also said that a previous announcement had not been issued for fear that it could trigger market manipulation.

Plans for more crypto derivatives

During the past year several announcements were made about new offers of crypto-derived products. In January, the Japanese investment group Fisco Corp. launched a cryptocurrency fund and revealed plans to offer derivatives based on digital assets. In August, another Japanese company, SBI Crypto Investment, acquired a 12 percent stake in the Clear Markets trading platform based in the United States. He also shared his intention to create a platform that allows institutional investors to exchange cryptocurrency derivatives.


Another company, on the other hand, recently delayed its plan to open a new bitcoin futures trading platform. Intercontinental Exchange, the owner of the New York Stock Exchange, announced this week that it will delay the launch of its Bakkt platform. Initially, trade was expected to begin in December this year. However, according to a recent announcement, Bakkt is scheduled to go on sale on January 24, 2019, as reported by on Wednesday.

Regulatory Challenges

Derivative products based on cryptocurrency have also attracted the attention of financial authorities around the world. In the USA In the US, bitcoin futures have been approved and are currently regulated by the Commodity Trading Commission of Basic Products of the country. And the French financial markets regulator, Autorit des marchs financiers, issued a statement in February this year stating its intention to take enrichment measures against crypto derivatives, and indicated that the provision of such instruments will require authorization.