CandleFocus

Crypto Options: A Key Tool for Institutions Navigating Volatility and Yield

Author: Content Editor
The role of the crypto options market is becoming increasingly important as the cryptocurrency market matures and institutional, corporate, and governmental adoption grows. The total listed bitcoin options reached over $40 billion in late November, while ether options remain relatively underwhelming with open interest totaling just $9.8 billion. Deribit dominates the options market, accounting for nearly 90% of the total open interest. The market sentiment for bitcoin options is positive, with a significant portion of open interest concentrated in call options with strike prices between $100,000 and $120,000. Centralized exchanges offer insight into market sentiment, while institutional investors prefer the crypto OTC market for customized solutions. OTC deals are often governed by master agreements, providing tailored trades with flexible terms. Regulated OTC counterparties offer a structured and transparent framework, minimizing counterparty risk and ensuring compliance. As institutional demand for options strategies grows, regulated OTC counterparties will play a pivotal role.

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