Specifically, together with the release of ETH options, OKEx will reportedly also roll out EOS options contracts on June 18th. The company also reportedly disclosed an amount of 1,000 ETH directed to the ETH Options insurance fund, to cover clawback.
As stated in the announcement, options reportedly enable purchasing or selling functions to hedge risk and help reel in the most profits available for traders. The announcement explained the distinction between contract and futures.
OKEx – recognized as one of the most major Bitcoin (BTC) futures exchange platform starting March this year – reportedly stated that financial derivatives “play an irreplaceable role in hedging risks and maximizing profit.”
“For example, when the price of ETH goes down, spot traders can only choose to hold or close their positions to cut losses. With ETH options, traders can choose to buy put options and profit from falling prices to offset losses in the spot market while holding ETH for possible future gains.”
OKEx will reportedly be deciding the mark prices for the contact, via employing Black’s model on real-time market data analysis. The final settlement price is reportedly decided using a time-weighted average of the asset’s price, over a determined time frame prior to the expiration date of the contract.