Crypto.com has enhanced its institutional offerings with the introduction of Fully Funded OTC Options, catering specifically to foundations and VIP clients on its exchange. This over-the-counter derivatives product enables eligible institutional traders to engage in vanilla European options transactions directly with professional sales traders, all within a private, off-orderbook environment.
The launch addresses longstanding challenges faced by institutional investors, especially when executing large options trades on public platforms, which are often susceptible to slippage and information leaks. By providing a more secure setting, Crypto.com aims to empower foundations and VIP clients to execute trades without the risks often accompanying public market transactions.
This new service offers a private venue for executing significant option trades, allowing users to create customized contracts aligned with their individual portfolio needs and investment strategies. The introduction of this OTC product is designed to lessen the market impact typically tied to large trades, thereby facilitating a smoother trading experience.
The Fully Funded OTC Options feature European-style vanilla options that come with full collateralization. Upon expiration, these options are physically settled, meaning that the underlying assets are transferred directly between accounts. Clients have the flexibility to customize expiry dates for their contracts, extending up to three months, which allows for tailored positions based on specific trading strategies. This collateralized approach mitigates liquidation risk, reflecting the company’s commitment to safety and security in high-value transactions.
In addition, the options are available in USD denomination, presenting an appealing avenue for foundations seeking to generate yield on their spot holdings through strategies like selling covered calls.
For convenience, institutional clients can request quotes via dedicated Telegram and Slack channels, where the sales team will manage the manual booking and confirmation process through a secure Sales Portal. The settlement of trades will rely on automated evaluations of in-the-money and out-of-the-money positions based on exchange index prices.
Expressing enthusiasm about the launch, Crypto.com highlighted that Fully Funded OTC Options serve as a significant enhancement to its suite of institutional products, further diversifying the customized derivatives solutions available to its client base alongside existing trading services.
