Crypto exchange Kraken has launched USD-settled Bitcoin and Ethereum options on its Pro platform, aiming to expand the derivatives market by targeting retail traders. The product features a simplified design with USD-denominated settlement to counter existing complex, institution-focused offerings. The options are initially available via RFQ to international clients, with a European rollout planned next.
Kraken options launch details
- ▪The new options are available on the Kraken Pro platform, initially through a request-for-quote (RFQ) system
- ▪Kraken has launched cash-settled, European-style options for bitcoin (BTC) and ether (ETH)
Crypto options market underdevelopment
- ▪The crypto options market is currently dominated by a handful of established venues including Deribit, CME Group and Binance
- ▪The crypto options market is considered an underpenetrated segment compared to traditional financial markets
- ▪Derivatives account for the vast majority of crypto trading volumes, but options remain a relatively small corner of the market
Retail-focused product design
- ▪Kraken's offering uses linear, USD-settled contracts, with premiums, profit, loss, and settlement all denominated in U.S. dollars
- ▪Options are integrated into the same unified account clients use for spot and futures trading, with portfolio margin enabled by default
- ▪Kraken believes the slow growth of crypto options is a product design problem, not a lack of demand
- ▪The product is designed to lower barriers for retail traders, who have historically gravitated toward simpler perpetual futures
Geographic expansion plans
- ▪The options are initially available to eligible international clients outside of Europe, North America, and Australia
- ▪Kraken plans to expand the offering to Europe at a later date, noting it already holds the necessary regulatory permissions
- ▪Future updates are expected to include a public order book, broader geographic availability, and support for additional assets
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