FTX US plans to launch options to complement stock trading offering
Quick Take
- FTX US went live with its stock trading service across 50 states.
- The firm is now eyeing options trading, which historically has been a big business for rival Robinhood.
FTX US — the crypto exchange affiliated with Sam Bankman-Fried's FTX — is plotting a move into equity options trading following the rollout of stock trading across all 50 American states.
As per an interview with Bloomberg News, FTX US president Brett Harrison said that the company will add options without providing a specific timeline.
Harrison said that expanding the product during a slowdown in trading across assets could allow the firm during a future bull cycle to "capitalize that opportunity."
An FTX representative said the launch of options is subject to regulatory review
Options, financial contracts that give a buyer the opportunity to purchase an asset at a specific price in the future, are used as a tool to speculate on a given asset or hedge an underlying position.
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Such offerings are big business for Robinhood, which is known for making profits from the controversial practice of payment for order flow whereby institutional trading firms pay Robinhood for offloading customer orders.
At the peak of the market, Robinhood brought in nearly $70 million in options payment for order flow compared to $49 million in PFOF for trading in non-S&P 500 stocks, as per data compiled by The Block.
FTX, on the other hand, is not accepting payments for customer order flow.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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