Kraken Enters Options Market with European-Style Bitcoin and Ether Contracts

Kraken, a cryptocurrency platform, has expanded its options offerings to Europe and is focusing on institutional adoption. The company launched European-style cash-settled options on bitcoin and ether for eligible professional and institutional clients on Kraken Pro in July. Director of derivatives at Kraken, Alexia Theodorou, stated that the firm has been thinking about entering the options market for a long time.

The new options contracts are linear and settled in US dollars, with premium, profit, and loss, and settlement denominated in fiat currency. Portfolio margin is enabled for every eligible client by default, reducing overall margin requirements. Clients can post collateral in more than 30 different currencies, drawing on the same multi-collateral pool that supports Kraken's existing derivatives offering.

Kraken has built its technology in-house and accelerated development in recent months as crypto options have taken market share. The company is focused on expanding into Europe, where it has a MiFID license, and does not currently have definitive plans for options in the US. Options trading will initially be available via request-for-quotes (RFQs), but Kraken intends to move towards a public order book as activity scales.