The options exchange Deribit has launched a new index product that focuses on Bitcoin volatility.

On Wednesday, the Bitcoin Volatility Index or DVOL was unveiled “with the aim of launching futures on this index soon”. Put simply, such futures would allow traders to bet on the volatility of the Bitcoin market.

“This index uses the smile of the implied volatility of the relevant expiration times to output a number that gives a measure of the annualized implied volatility of 30 days,” said Deribit in a blog post that set out the parameters for the index.

As the company further noted:

“Volatility index futures are not only a very effective and simple way to trade volatility, they also open up new trading strategies such as more possibilities of strategies of realized vs. implied volatility, hedging of volatility exposure from options, volatility mean reversion and momentum strategies. “

As shown in the chart below, Deribit continues to dominate the Bitcoin options market, accounting for nearly 90% of the share of open interest for such products. As previously reported, Deribit moved late last year to require verification of its dealer base.

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