Deribit’s New Bitcoin and Ether Options Will Be Shaped by US Elections

Deribit, the leading crypto options exchange by trading volume, has announced new options that allow traders to effectively manage their bitcoin (BTC) and ether (ETH) positions depending on the outcome of the pivotal U.S. presidential election on November 4.

Market leaders bitcoin and ether-linked options received positive feedback from traders.

“The US elections have become a focal point for risk assets, including crypto,” said Jeff Anderson, a senior trader at STS Digital. “They will have a dual impact on fiscal policy and financial stability. Options are an important hedge against this uncertainty, so it’s only natural that Deribit would make this decision.”

While Republican candidate Donald Trump has yet to lay out detailed proposals for crypto regulation, he has gained the industry’s support through a number of actions, including his outreach to bitcoin miners and his upcoming speech at a Nashville conference.

Therefore, BTC and ETH could witness increased price volatility ahead of and after the elections, which could encourage investors to use derivatives like options to hedge their portfolios. Options provide insurance against upward or downward price movements in the underlying asset. A call option protects against upward volatility, while a put option protects against price declines.

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Deribit’s election options will begin trading at 08:00 UTC on July 18. They will expire three days after the election results are announced on November 5.

Lauren Kssis, crypto ETF specialist at CEC Capital, told CoinDesk about the options: “It’s a smart move by Deribit to offer these options. It will allow investors to position themselves before, during and even after the results are announced. It’s a great way to leverage and hedge your investment.”

Traditional market traders also use options to manage their exposure to the market when faced with binary events such as the U.S. elections or corporate earnings whose outcome is uncertain.