Key facts
- Kraken has launched USD-settled options for Bitcoin and Ether on its Kraken Pro platform.
- The new contracts are European-style and initially available via request-for-quote (RFQ).
- The offering is designed to be simpler than existing crypto options, catering to retail traders.
- Premiums, profit and loss, and settlement are all denominated in U.S. dollars.
- Kraken plans to expand the offering with a public order book, wider geographic reach, and more assets.
Kraken has launched USD-settled options for Bitcoin and Ether on its Kraken Pro platform, marking a strategic move to simplify access to crypto derivatives for a broader range of traders. The exchange aims to grow the crypto options market by making it more accessible, rather than solely competing for existing market share.
The new European-style, USD-settled contracts are initially available to eligible international clients outside of Europe, North America, and Australia through a request-for-quote (RFQ) system. Kraken plans a subsequent rollout in Europe, where it already possesses the necessary regulatory permissions.
According to Alexia Theodorou, Kraken's director of derivatives, the current crypto options market is underdeveloped compared to traditional finance, largely due to products being designed primarily for institutional investors. She believes the opportunity lies in expanding the addressable market by offering straightforward, dollar-settled contracts that integrate seamlessly with existing spot and futures accounts. This approach aims to lower barriers for retail traders who have historically gravitated towards perpetual futures due to their relative simplicity.
Kraken's offering allows premiums, profits, losses, and settlements to be denominated in U.S. dollars, removing the need for clients to manage crypto collateral or complex settlement processes. The exchange has also integrated options into a unified account, enabling portfolio margin by default to reduce collateral requirements. Users can post collateral in over 30 currencies. The company has invested in educational tools to help traders understand strategies like calls, puts, and multi-leg positions.
Future developments for Kraken's options offering include the introduction of a public order book to enhance price discovery, broader geographic availability, and support for additional digital assets.