- FalconX’s Electronic Options platform gives institutions 24/7 access to OTC crypto options via UI and API.
- It improves efficiency by using a liquidity network and RFQ model to fix market fragmentation.
- The launch aligns with rising institutional demand and growth in crypto derivatives.
Solving fragmentation in crypto options
The institutional digital asset prime broker, FalconX, claimed the Electronic Options platform was built to address the historical inefficiencies that have limited the trading of crypto derivatives. Fragmentation in over the counter markets and limited access through exchanges remained strong obstacles to hedge funds, market makers and fintech platforms according to the company. FalconX intends to modernize crypto options by using a similar approach to Request for Quote (RFQ) models applied to both the FX market and credit markets to provide a differentiated liquidity base and workflow optimization.
FalconX Global Co-Head of Markets, Josh Lim, said that the new system provides the same execution quality as the firms OTC desk and in a format that could be scalable and spread. He further said that the platform was designed with real 24/7 access, which addressed problems associated with 24/7 trading requirements in the industry. The infrastructure of the company is one of the biggest institutional options desks in the world, which offers proprietary liquidity to enhance its pricing results.
Growing institutional adoption
Electronic Options is a platform that is launched with support of BTC, ETH, SOL, and HYPE, among others. Such features as a matrix-based strategy builder and integration with APIs of enterprise quality are included. The major liquidity pool that FalconX has emphasized as a distinction feature is aimed at improving the quality of the execution.
The introduction of the platform coincides with the overall increase in the demand of crypto derivatives. At the start of this month, CME Group announced it will introduce options based on solana (SOL) and XRP futures, which will be added to its BTC and ETH products. In August, Coinbase acquired a crypto derivatives exchange Deribit, which has an open interest of $59 billion, and trade volume of more than 1 trillion annually under Coinbase.
Access to markets is also being increased by regulators. The U.S. Securities and Exchange Commission authorized spot bitcoin ETFs options trading last year, and spot ethereum ETF options are currently under consideration. The move by FalconX into electronic OTC options is part of this trend and aims to offer institutional investors 24/7 infrastructure, scale, and liquidity.
Disclaimer
The content shared on KryptoVaultDaily is for informational purposes only and does not constitute financial or trading advice. We do not offer guarantees and assume no responsibility for investment decisions based on the material provided. Always research and seek guidance from a licensed financial advisor before trading cryptocurrency or investing.
