Hong Kong-based algorithmic crypto trading firm GSR today launched its new cryptocurrency structured product, called the ‘Bitcoin Halo Option.’ The new derivative allows users to trade the difference between a value of a trading account set up front and the variance in value realized during the duration of the option lifecycle.
To clear up the jargon associated with this common form of derivatives trading, GSR further elaborated that Halo Options are active instruments as the trader can place up to 10 trades per day in the BTC/USD markets until the options termination date is reached.
The company expects Bitcoin Halo options to be a popular way to take advantage of a volatile market by strategically hedging some of the risks.
More specifically, the investor pays a premium upfront to buy the option, while the trading account starts with a value of zero. The holder then generates profits if the trading account has positive value at the maturity date, but he loses the premium if this vale was negative.
Options are a type of financial derivative that gives buyers the right to buy or sell an asset at an agreed price in the future. Per the announcement, GSR’s new product has not escaped that phenomenon as it allows investors to manage and limit some of the risks in their BTC trades.
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Founded in 2013, GSR aims to create a crypto-derivatives market that mimics the traditional markets in infrastructure. To push the wave of crypto-adoption within the derivatives realm, it mainly focuses on structured investments products whose value is linked to the performance of underlying cryptocurrency markets.
GSR co-founder Cristian Gil joins BTC summit
Earlier last month, GSR launched the variance swaps which allow investors, traders, businesses and other crypto portfolio holders to hedge against crypto volatility.
“Unlike most traditional financial markets, trading in cryptocurrency is open 24/7 and positions require constant supervision. The GSR Bitcoin Halo Option is essentially a tool for active traders who want to protect against serious losses,” GSR co-founder Cristian Gil said.
Of note, Cristian Gil will participate in the Finance Magnates’ Barcelona Trading Conference where distinguished panelists will weigh in on the crypto products, markets, and trends that matter the most in their fields. GSR co-founder will discuss the most burning questions the crypto trading community is facing at a dedicated panel named “Understanding The Crypto Market Structure: Liquidity in Focus.”
The panel will also touch on which challenges lie ahead for liquidity providers amid a prolonged crypto bear market, and how they can mitigate them.