You can now trade Coinbase (COIN) options on the NASDAQ

2021-4-21 01:00

Nasdaq traders can bet on the future share prices of Coinbase Global (COIN) starting today, as per a report on news outlet Reuters on Tuesday.

Coinbase options arrive a week after DPO

As per the report, the launch of the equity options on the stock will offer a new way for investors to bet on the price movements of Coinbase as it reacts to trends in the crypto market and sees its own valuation gyrate as a result.

For the uninitiated, options are a financial instrument that allows their holders the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date. 

‘Call’ options allow the holder to buy the asset at a stated price in the future, while ‘Put’ options allow the holder to sell the asset at a stated price within a specific timeframe.

Their pricing is based on the value of underlying securities, such as stocks, bonds, or cryptocurrencies, and the holder pays a small upfront amount to capture a price gain. Option payouts can range from small percentages to many multiples of the capital amount, with the downside being the loss of the upfront amount (including any fees).

Bitcoin options have, in recent times, become a popular market. As per data on analytics service Glassnode, crypto exchange Deribit underwrites several billion dollars worth of BTC options each month. Similar products on Binance and OKEx see a fraction of those volumes but are a growing market.

Insider selling

The options listing comes a week after Coinbase traded its shares to the public for the first time. CEO Brian Armstrong sold over $292 million in shares in total, as per regulatory filings.

As per Reuters, Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per share for total proceeds of $291.8 million. The exchange, in all, sold over $5 billion worth of shares in total during the first day of trading.

The Coinbase direct listing was one of the most iconic developments for the broader cryptocurrency space in recent times, with the exchange reaching a valuation of as high as $100 billion last week.

Shares of COIN have since tumbled, but options could be a savvy way for investors to hedge against the exchange’s potential volatile price movements.

The post You can now trade Coinbase (COIN) options on the NASDAQ appeared first on CryptoSlate.

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