Cryptocurrency derivatives firm Bakkt has announced that it will be launching options tied to its physically-settled Bitcoin futures contracts on December 9. Bakkt’s options will be the so-called European variant of options, which means that they cannot be exercised before their expiration date – Bakkt says this design “reduces operational burdens”. Traders will be able to choose between physical and cash settlement.

“The new contract is based on customer feedback and is designed to hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies. ICE Futures U.S. has self-certified the contract with the CFTC and we’re excited to leverage the benchmark futures prices and institutional grade custody to meet the needs for a regulated options contract.”

With its options announcement, Bakkt might be trying to outpace the CME, which currently dwarfs Bakkt in terms of trading volume for Bitcoin futures contracts – it’s worth noting here that CME’s BTC futures are cash-settled, while Bakkt’s are physically-settled. The CME says it plans to launch options on its Bitcoin futures early in 2020.

It’s no secret that the trading volume displayed by Bakkt’s contracts since they launched on September 23 has mostly been met with disappointment in the cryptocurrency community, perhaps due to unreasonable expectations.

However, yesterday’s sudden surge in volatility, which sent BTC crashing below the $8,000 price level, has resulted in record volumes for Bakkt – around $4.81 million worth of Bakkt contracts changed hands in 24 hours.