Huobi Launches Stock Exchange for Crypto Derivatives

Huobi Global announced launching a beta version of the cryptocurrency derivatives trading platform. The new tool, Huobi DM allows its users to perform operations with short and long positions to generate income from the increasing volatility of prices for bitcoin and altcoins.

Weekly, fortnightly, and quarterly contracts are available on the platform. At the moment, the platform has already begun to serve the first operations with derivatives for bitcoin, secured by American dollars. For the time being, the marketplace will conduct all settlements under such contracts only in the first cryptocurrency.

In nominal terms, the cost of one derivative for bitcoin will be $100, for all other contracts it is set at $10. Huobi DM offers a leverage of 5x, 10x or 20x.

The company also draws attention to the fact that the launch of a new platform in the network has activated fraudsters who collect information from users outside the main communication channels of the platform.

Derivatives, or derivative financial instruments, are beginning to confidently enter the cryptocurrency market. These are securities based on the value of other assets. They are estimated according to the value of the other asset and take the form of a contract involving two or more parties. In essence, they are a means used by market players to transfer their own risks to others. Derivatives can be tied to almost any asset.

Crypto derivatives can increase liquidity and trade in digital assets. New instruments will begin to attract institutional investors, moving new significant cash flows to crypto markets. This process will probably cause an increase in trade turnover and a decrease in the level of volatility. It might also help set a new round of activity in the digital asset market.

In the near future, a new wave of launches of cryptocurrency derivatives is expected. Goldman Sachs, a large investment bank, began to attract a limited number of its clients to launch bitcoin derivatives, which will be settled in fiat. The tool will be similar to cryptocurrency futures from the CME and CBOE sites, but it will not be traded on the exchange, sources familiar with the situation say.

Crypto community is also awaiting the launch of the Bakkt platform, whose first products should be futures contracts for bitcoin with a physical supply of the asset. Recently it became known that this event is postponed and will not take place until January 24, 2019.

Morgan Stanley is another large American banking holding that announced its intention to offer its clients to trade complex derivatives linked to bitcoin. Several more companies are awaiting SEC approval of applications to launch Bitcoin-ETF, but the U.S. regulator continues to delay the decision.

Earlier, the company Huobi Global has been included on the list of the world's largest giants providing services for trading in digital assets. Recently, the platform announced access to the Middle East and U.S. cryptocurrency markets.