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Options allow for more sophisticated investment strategies than just buying and selling an asset.
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For Balchunas, what he sees in the first hours of trading “is a ton for the first day.”
Options on the iShares Bitcoin Trust ETF (IBIT), which is issued and managed by the BlackRock company, are having a successful debut on Wall Street this November 19, 2024.
As reported by CriptoNoticias, These financial products were launched today on the Nasdaq stock exchange. “Today everything changed for the bitcoin market,” said analyst Joe Consorti, who detailed the importance of the news.
Now, with the trading day in progress, the first figures are beginning to be seen. Eric Balchunas, senior analyst at Bloomberg Intelligence, who specializes in mutual funds, wrote in his X account that “so far, there are a few hundred million (dollars) in options volume on IBIT.” This, he clarifies, “is a ton for the first day.”
IBIT ETF options trading began. Source: Eric Balchunas – X.
Balchunas details, in relation to the previous image, that “here is a classification of contracts by volume.” What is observed -explains the specialist- is that “almost all are purchase options”.
In Balchunas’ opinion, “it seems very bullish, especially the C100 on December 20, which is basically betting that the price of bitcoin will double in the next month.”
Although the bet of some traders reflected in the volume of options may seem very optimistic, it is important to clarify that It does not necessarily mean that the price of bitcoin will double in a month.
Options are financial instruments that allow investors to speculate on price movements, but they are also used for hedging and risk management strategies. Therefore, high volumes in call options could reflect both bullish expectations and the search for protection against specific scenarios.
A milestone in the bitcoin market
The introduction of options on the iShares Bitcoin Trust ETF marks a significant moment for the bitcoin. This new instrument expands the range of strategies available to investorsespecially institutional ones, which value tools to mitigate risks in volatile markets.
Options allow investors to hedge against unexpected movements in the price of bitcoin. For example, a fund that owns shares of the IBIT ETF can purchase put options as insurance against a possible price drop. Likewise, they can use purchase options (calls) to take advantage of an upward movement without needing to invest directly in the underlying asset.
With the arrival of IBIT options there are great chances that adoption will increase by increasing their accessibility for large investors. Bitcoin ETFs had already facilitated the entry of institutional capital into the market, but options on these products open the door to more sophisticated strategies.
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