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Singapore’s DBS Bank has announced that it will launch over-the-counter (OTC) crypto options trading and structured notes for institutional clients in the fourth quarter of 2024. The bank said in a statement on September 17 that it will continue to offer financial products tied to the prices of major digital assets such as Bitcoin and Ethereum.
DBS said that with the launch of these new services, institutional clients will be able to invest in crypto assets through options trading and structured notes. Crypto option contracts have a value derived from the price of the underlying cryptocurrency, allowing investors to “hedge” against the price fluctuations of the assets. These contracts give investors the right to buy or sell the assets at a pre-agreed price on a specific date.
Structured notes, on the other hand, are a type of debt instrument issued by financial institutions such as banks, and their returns are based on the underlying assets.
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Hedging against market volatility According to DBS, customers who store their BTC and ETH assets with the bank can hedge their positions against market volatility using different option structures. Customers who want to manage cryptocurrency volatility can buy a put option and have the right to sell Bitcoin at a fixed price, even if Bitcoin prices fall below the fixed price on a specified date.
Jacky Tai, Head of DBS Trading and Structuring, said that professional investors continue to increase their investment in digital assets in their portfolios. Tai added that this new service expands the company’s options in digital assets and allows customers to better manage their digital asset portfolios with advanced investment strategies.
DBS Bank continues to adopt Web3 infrastructure DBS Bank continues to increase its investment in Web3 infrastructure. On August 13, the bank launched a pilot application featuring DBS Treasury Tokens on a permissioned, EVM-compatible blockchain to enhance corporate liquidity management. On August 22, it announced another pilot application integrating blockchain technology to facilitate the distribution of government grants. The bank stated that blockchain-based grant distribution will increase efficiency and improve governance.
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