LedgerX Trades Over $1 Million In Bitcoin Options And Swaps In First Week

Tyler Durden's picture

Bitcoin derivatives clearinghouse LedgerX has announced that the first bitcoin derivatives trades have taken place on its platform - an important milestone for the nascent digital currency market that could open the door to more institutional involvement and, some say, the creation of the first bitcoin-focused ETF.

LedgerX confirmed rumors that it had already started clearing bitcoin derivatives trades in a statement provided to CoinDesk and a handful of other media outlets. According to figures provided by the company, LedgerX facilitated trading in 176 swaps and options contracts in its first week, an amount with a notional values of more than $1 million, according to CEO Paul Chou.

"This week, a new standard is set for transparency, oversight and counter-party assurance. Institutional investors and traders can now rely on a guaranteed clearing and settlement process when transacting bitcoin contracts," Chou said.

As CoinDesk points out, while the initial LedgerX trades appear to be exclusively bitcoin focused, the details of the license granted to the company by the CFTC in July allow for the creation of derivatives for other digital currencies as well. The company is reportedly working with options trading shops, asset managers, hedge funds, bitcoin miners, family offices, investment banks and virtually anybody else interested in helping it create a market for the new contracts.

"Our regulated, institutional-grade platform enables participants who were sitting on the sidelines, to enter the digital currency market."

LedgerX is licensed as both a swap execution facility (SEF) and a derivatives clearing organization (DCO).

The CFTC gave its blessing to LedgerX back in July when it approved the creation of the first designed bitcoin SEF, or swap execution facility. Previously, bitcoin derivatives were traded exclusively OTC on exchanges like BitMEX. But now, trading in bitcoin options will be centrally cleared in the same manner as option contracts on equities.

Congress mandated the creation of SEFs as part of its Dodd-Frank Wall Street reform bill in a bid to bring greater transparency to derivatives trading after synthetic CDOs and other shady “hedging instruments” tied to the mortgage securities helped wreck the economy in 2008,

Dodd Frank, helped by a raft of CFTC rules, helped create a complex trade-reporting ecosystem in US markets, which RiskFocus has illustrated in the infographic below:

Bitcoin options trading has come a long way since late 2015, when the CFTC officially went after bitcoin company Coinflip for operating a platform for trading bitcoin options without the proper authorization - confirming in the process that bitcoin would be treated as a commodity for regulatory purposes.

We imagine LedgerX won’t have too difficult of a time moving inventory, considering bitcoin’s astounding run of new record highs persists unabated. In a market starved for volatility, giving the "big boys" the ability to trade with massive leverage on what is already the most volatile asset class in existence is just what some funds need to make their year as they swing for the fences with 20x (or more in) margin.

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razorthin's picture

Let the bank manipulation (lower) begin...

Take advantage of the huge arbitrage opportunity to trade your BC for PM before it's gone.

fiatliberty1776's picture

No naked short selling is allowed. Sorry 

VD's picture

no need for that; just moar buttcoin forks'll do.

cheka's picture

the beginning of the end

tick tock

VD's picture

yep. videogame coins, points and credits that were "mined" by Chinese forced slave gamer laborer farms-- remember that? this is no diff, except they are running the "reality" chimera extra hard now via btc et al. "coins". too obvious.


to wit:







not seeing a pattern?


& those japanese that dont have sex, dont have jobs and are sitting around pumping btc? yep, itz "coins" like their "relationships". lotta yen in this crypt0-scam0la.

overbet's picture

All the different angles you come up with to attack btc I am starting to think youre a closet btc hoarder. If I think something is a scam I might say it once or twice, but you hit every thread with another outrageous theory. Please continue it is amusing especially as the price continues to rip. 

VD's picture

Madoff ripped too. so? there are many angles to the "satoshi"... this of this as a psa.

overbet's picture

Whats the point? WMT, fang stocks, the whole market ripped too and made a lot of people rich. Even gold ripped before. I have a friend who put everything he had into physical gold ahead of y2k, about $2m invested at the time. He cleaned up. Things rip that arent scams.

afronaut's picture

I was loaded up on Comex gold options at the time. Made a killing. I know the feeling. Everyone around me thought I was a genius. Many followed my lead into Uranium and lost bigly. 

FactDog's picture

This is the worst thing to happen to BTC.  When they discover how to naked short it -- we are screwed.

tmosley's picture

Nah, just the rantings of an enraged peanut.

ebworthen's picture

"Bitcoin derivatives".

If that isn't the Black Tulip singing I don't know what is.

strannick's picture

"I have a good bit of one of those quantum resistant coins."

But arent yiu assuming someone will want  one of your -or a million other newly created- coins that arent really coins?

You wont even be able to pet and drool over "the precious" unless maybe  its glimmering  inside a memory card?

fiatliberty1776's picture

brass:gold::hardforks:bitcoin. Hardforks have only proven bitcoin's anti-fragility 

VD's picture

keep dreaming. as btc developers plan for quantum computing "hacks".

fiatliberty1776's picture

Please explain more why qunatum computing is a risk for btc. You can't because it won't be and you have no idea why but you are just repeating things you saw but don't understand at all. Please prove me wrong

VD's picture

why dont u ask the btc developers? they're working on it.

fiatliberty1776's picture

Show me the proof or stop making things up to support your narrative. Seriously I want to learn. You don't see me claiming scientists are on the brink of achieving alchemy #fakenews

VD's picture

the btc developors as well as other "coins" are working to quantum proof. just do a little research. nothing made up here.

fiatliberty1776's picture

It seems like you have already done the research so please point me in the right direction where I can find this wealth of knowledge that only you seem to have

quadraspleen's picture

You’re a fukn idiot

Arnold's picture

You are correct.
Positronic brains are the real threat.

YUNOSELL's picture

Stupid is as Stupid does get manipulated. Buy into that always escaping American dream you greedy little fuckers.

tmosley's picture


I wonder if you will live to comprehend the utter stupidity of your younger self?

VD's picture

more insults. okay. you just ask the developors my little overzealous crypto-troll on the hedge 24/7. why not go out and get a girlfriend/boyfriend?

tmosley's picture

Not an argument.

Quantum resistant encryption already exists. Some coins already use it, ffs.

VD's picture

bitcoin uses it? really? gtfo.


read the article again. carefully. see who is pumping this now? hint: it's an assetless "asset" class.


when this whole thing blows, lotta tearz will flow.

tmosley's picture

I love how your brain is unable to parse my comments.

It's like taunting a dog over the intercom.

A very unlikable dog.

Ok, maybe a cat.

VD's picture

some coins is not btc. dummy. you sling insults harder when you're wrong, but they're all 3rd rate insults.

tmosley's picture

Yeah, that's what I said you retard.

It can be added to the BTC protocol in about five minutes. If it isn't, then I will be rich, Rich, RICH, RICH because I have a good bit of one of those quantum resistant coins.

While you will sit there and whine like you always do.

VD's picture

so easy, yet not done. the dummest people proclaim their riches. i am going to ignore you from now on. you wont grow a brain. ever.

tmosley's picture

Hahaha, now go away, before I taunt you another timah!

fiatliberty1776's picture

Still waiting on the evidence for the claims you are making. Should be easy for a smart gal like yourself who knows everything especially about really complicated stuff like digital currencies and computer science. Please enlighten us

VD's picture

i gave you the evidence. developers working on securing btc against quantum hacks. you can look that up on your search engine of choice; it will yield results.

fiatliberty1776's picture

Usually the one making (false) claims is the one that needs to provide evidence otherwise it is true that scientists have finally figured out a way to make gold out of lead. You can look that up on your search engine of choice; it will yield results

Is your search engine broken? Please send me a link, I am always willing to learn new things unlike goldbugs

Arnold's picture

Middle man cut is the place to be now.


Arnold's picture

Please establish your line of credit with the Casino manager.

runswithscissors's picture

girlfriend/boyfriend? or a gender confused partner?

blentus's picture

I guess you won't mind going into details and explaining what are those "quantum computing hacks"?

Thanks in advance.

maxblockm's picture

You have no idea how a fork works don't you. If BTC forks, the fork is not BTC, it trades under a different symbol, like BCH. BTC supply is not affected, market cap is not affected, and price is not affected.

A fork does not make more BTC.

Bunga Bunga's picture

With that funny paper, yes. But when you insist on delivery, they can't play their shady games anymore, beause Bitcoins can be delivered p2p 24/7/365. Deliver or bust.

Xena fobe's picture

BTC ownership is concentrated.  No need to naked short to manipulate. 

fiatliberty1776's picture

LOL! Gold ownership is concentrated in the hands of Central Bankers. During the next financial crises they will dump it on the naive goldbugs to buy real assets and then laugh at the bagholders caught with the shiny rocks which have little real utility while they take ownership of all the factories, farmland, homes and whatever assets they want

Support your local Central Banker and buy GOLD!!

edit: Would any of the downvoters care to tell me why I am wrong?

shizzledizzle's picture

If I have a endless balance sheet it's pretty fucking naked. Everything one desires can be naked until people seek out REAL, HARD assets. Then there is a problem, and a fucking big one mind you.

fiatliberty1776's picture

A great feature of digital currencies is that you can prove ownership of coins anywhere and anytime so you have to prove ownership of coins before you can short them. Would be hard/impossible with physical objects like gold so there will need to be derivitives and paper contracts that are worthless and can be used to manipulate prices where you don't need to have that kind of trading system with bitcoin

tmosley's picture

Peanutz think this will be the end of bitcoin. Again.

HRH Feant2's picture

Yep. Sold and went to cash on the new highs. Waiting for a pullback to $5500 to get back in. It is predictable now.

FreeShitter's picture

I sold some at 6100......ready for 3.8-4.2k after the HF. The window will be short this time.