Deribit, the largest cryptocurrency options platform, launches cryptocurrency options for the U.S. election schedule to assist with trading hedging.

The largest cryptocurrency options exchange Deribit has launched Bitcoin (BTC) and Ethereum (ETH) options related to the upcoming U.S. presidential election. Cryptocurrency traders view these options as important tools for managing risk and protecting capital, especially in anticipation of market volatility.

New Options for Election-Related Volatility

Deribit has announced the launch of options designed to help traders navigate expected significant market volatility during the U.S. presidential election on November 4. These election-expiry options are linked to the two major cryptocurrencies in the market, Bitcoin and Ethereum.

Early Introduction of 8 November US ELECTION Expiry 🇺🇸

Based on client demand, we have decided to introduce the 8 November 2024 options expiry ahead of the regular introduction timing.

The early introduction is aimed at enabling our clients to position themselves effectively… pic.twitter.com/FAkCkROUwr

— Deribit (@DeribitExchange) July 16, 2024

Traders believe, "The U.S. election is a focal point for risk assets, including cryptocurrencies, and will have a binary impact on fiscal policy and financial stability. Options are crucial tools for hedging this uncertainty, hence the natural listing of these expiry options on Deribit."

Potential Impact of the U.S. Presidential Election on Cryptocurrencies

Republican candidate Trump recently expressed support for digital assets, and his solid lead in the polls following shooting incidents has caused Bitcoin to surge.

While Trump has not detailed his plans for cryptocurrency regulation, his interactions with Bitcoin miners and plans to appear at a Bitcoin summit have garnered industry support.

Deribit's Launch and Expiry of Election Options

Deribit's election-expiry options will go live on July 18 at 8:00 UTC and expire three days after the announcement of the election results on November 8. Each Deribit options contract represents one BTC or ETH.

Experts' Views on the New Options

"These options are a smart move by Deribit; they allow traders to position themselves before, during, and after the election, with a three-day buffer post-results. It's a great way to leverage and hedge risks simultaneously," said Laurent Kssis, cryptocurrency ETF expert at CEC Capital, stating.

Application of Traditional Market Strategies to Cryptocurrencies

In traditional markets, traders use options to manage risk positions on binary events such as elections or company earnings. The Chicago Mercantile Exchange (CME) explains that traders may employ straddle option strategies, simultaneously buying put and call options at the same strike price to profit from significant price movements resulting from such events.