Record volumes of bitcoin futures and options were traded in March; VIX options bet that markets will fall; CME to launch Lithium futures;
Record volumes of bitcoin futures and options were traded in March
Based on data compiled by Block Research, the volume of Bitcoin futures traded in March surpassed 2 trillion USD. The previous high was recorded in January where the markets recorded a 2.09 trillion USD volume. In March 2021, this went up to 2.13 trillion. Volume of Bitcoin options traded in March amounted to around 28.63 billion USD.
Regardless of the entrance of market giants like CME, Bitcoin futures and options are still more popular at crypto specific operators like Binance and Deribit.
Source: https://www.theblockcrypto.com/linked/100600/record-volumes-bitcoin-futures-options-march-2021
VIX options bet that markets will fall
VIX options have an inverse relationship with the S&P 500 status. The index is set up so that it mathematically decays with time, if no major change happens in the market. In theory, but a sudden spike in the market as well as a sudden crash could drive the VIX high. However in practice, market crashes happen over a shorter period of time and cause more volatility in the market than a bull market.
The VIX index has been following a lowering bet each month until recently. The Bloomberg article noticed that there are two peculiar options positions for VIX in July 2021. The long option position is placed at a strike of 25 and the short position is placed at a strike of 40. This assumes that the VIX index will end up somewhere between 25 and 40. As of early April, the VIX index hovers around 17.
If the bets were to be true, we could see a similar market crash like in late October 2020.
CME to launch Lithium futures
CME announced that they will be launching Lithium futures in May 2021. The decisions comes at the back of increased popularity in lower carbon emission alternatives for vehicle production.
Over the past few years, EV and hybrid vehicles have seen an increase in popularity. Both EV and hybrid vehicles require Lithium and Cobalt for batteries. CME believes that the manufacturers will be able to hedge their risk and manage sales and production using the listed futures.
CME listed Cobalt futures in its markets back in December 2020. The new Lithium futures will be also cash settled, similar to Cobalt futures.
