OKEx has launched option contracts for ether (ETH) since June 4, and also announced the upcoming launch of options for EOS crypto on June 18.
The company also announced that it has already placed 1,000 ETH in the insurance fund for new Ethereum options.
An OKEx announcement says options allow you to buy or sell an underlying asset to hedge risks and maximize traders' profits. The company also explained how an option contract differs from a futures contract:
“Unlike futures contracts, owners are not required to buy or sell an asset if they do not want to do this.”
OKEx has become one of the leading bitcoin futures exchanges since March 2020. According to the company, derivative financial instruments "play an irreplaceable role in hedging risks and maximizing profits."
The announcement also says:
“For example, when the price of ether falls, traders can hold or close their positions to reduce losses. With Ethereum options, traders can select sell options [put options] and profit from falling prices to compensate for losses in the spot market and keep the ether to make possible future profits.”
Market prices for option contacts will be determined by OKEx using real-time analysis of market data. The final estimated prices are determined by the weighted average price of the asset for the period before the expiration of the contracts.