Crypto derivatives exchange Deribit launches index for implied bitcoin volatility

advertisement

Options exchange Deribit has launched a new index product focused on bitcoin volatility.

Unveiled Wednesday, the Bitcoin Volatility Index, or DVOL, was debuted "with the purpose to launch futures on this index soon." Put simply, such futures would allow traders to place bets on the volatility performance of the bitcoin market. 

"This index uses the implied volatility smile of the relevant expiries to output one number that gives a gauge of the 30 day annualised implied volatility," Deribit explained in a blog post, which laid out the parameters for the index.

As the firm went on to note:

"Volatility Index Futures are not only a very effective and simple method to trade volatility but also opens up new trading strategies such as more possibilities of realised vs implied volatility strategies, hedging volatility exposure from options, volatility mean reversion and momentum strategies."

As shown in the graph below, Deribit continues to dominate the market for bitcoin options, constituting nearly 90% of the share of open interest for such products. As previously reported, Deribit moved late last year to require its trader base to become verified. 

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC
More