Singapore-based options trading platform Sparrow has rolled out a new trading platform that enables institutions and individuals to trade options that are settled by smart contract.
Sparrow claims to offer a secure way for traders to control risk in the volatile digital asset market and monetise their assets.
With Sparrow’s new platform, users will now be able to trade customised Bitcoin and Ethereum European options with no counterparty risk and can instantly convert more than 25 trading pairs at zero cost with Sparrow’s ConvertNOW Facility.
Users can start trading on the company’s options products TradeBOOST and TradePROTECT in three steps. The platform also offers trading tools and hedging solutions for professional and institutional traders through a global liquidity book, trading APIs and a full options order book.
Its options are settled on Ethereum smart contracts and are deployed onto a Proof of Authority chain called Nidus.
By using a hybrid off-chain approach, traders on the platform will be able to seamlessly trade with a responsive and updated order book, coupled with transparent and automated settlement of digital assets options.
Sparrow CEO Kenneth Yeo said: “We understand the challenges all traders face while trading digital assets. Options used to be an instrument only professionals could use. With the launch of Sparrow, everyone can use options. We built Sparrow to make trading options simple, secure and accessible.”
To serve a diverse ecosystem, the Sparrow Dollar (SP$) is used as a settlement currency for the new platform. The dollar will aggregate the demand across several tokens, offering better liquidity for each option pair, allowing traders to settle contracts more easily with a commonly denominated settlement currency.
The SP$ can be obtained from the ConvertNOW Facility on the trading platform.
The company charges a transaction fee of 0.1% of the contract notional value payable in Bitcoin, Ethereum or Sparrow Tokens (SPO). Users also enjoy 50% discount on transaction fees if they pay using its Sparrow Tokens.
Kenneth Yoe continued saying: “Sparrow has managed to transform a traditionally complex and illiquid trading instrument, bringing options trading to the mass market. Sparrow Options are more liquid than OTC options and more customizable than standardized contracts, enabling traders to enjoy the best of both worlds.”