Thursday, May 17, 2018

Bitcoin trading takes on an options feature as newly licensed platform will provide an opportunity for crypto holders to earn a yield

On May 15 the CFTC approved a licence for LedgerX which will provide holders of Bitcoin the opportunity to earn a yield by having the cryptocurrency stored on that platform, and where owners can sell a form of a call option if they like on their holdings..

Expanding Bitcoin beyond exchanges and into the financial sector, this new model is one of the first to offer derivative trading of cryptocurrencies.

Trading and clearing platform LedgerX has launched a new Bitcoin (BTC) savings product that is licensed by the US Commodities Future Trading Commission (CFTC), Forbes reported May 15. 
The savings product introduced by LedgerX is certified by a CFTC derivatives clearing organization (DCO) license and a swap execution facility (SEF) license. Juthica Chou, Chief Operating Officer at LedgerX said: 
The licenses permit users to earn a yield on their Bitcoin assets. Rather than just “hodling” and hoping that Bitcoin appreciates, investors can earn a fiat-based yield on their BTC by employing what is referred to as a call overwrite technique, wherein an investor deposits BTC into LedgerX, then sells a call option at a slightly longer date, with a higher strike call option. 
The project is designed to simplify BTC option trading to a basic point-and-click format, so “less sophisticated” bull traders can potentially get a premium price on their holdings. The product’s interface allows users to choose the implied rate they’re anticipating to earn and the number of BTC they wish to earn the yield on. Chou said: - Coin Telegraph

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