Oil Futures Launched On Crypto Derivatives Exchange FTX

April 22, 2020 / by Crypto.IQ

The oil market has been on a wild ride recently, with West Texas Intermediate (WTI) oil futures plunging as low as negative $40 earlier this week, due to there being too much oil supply and nowhere to store it. Oil definitely seems undervalued at this point, and investors worldwide are likely scrambling to buy oil. Fortunately, there is now a crypto-based option for speculating on oil, since FTX has launched oil futures.

The FTX oil futures contracts expire to the spot price of WTI plus $100. Essentially, the FTX system could not handle if WTI prices went negative, so $100 is added to help to ensure that there is never a negative oil futures price on FTX.

The existence of oil futures on a crypto derivatives exchange, which may be an industry first, could lead to an interesting and possibly profitable interplay between crypto and oil market trading. Indeed, the oil market is one of the best measures of the strength of the global economy, with oil going down if the global economy weakens, and going up if it strengthens.

Beyond the brand new oil futures, FTX is known for having an increasingly diverse assortment of derivatives products tied to real world assets, in addition to 101X leveraged crypto futures. One of the more interesting contracts on FTX is the President Trump re-election futures, where people are betting on whether Trump will win the November elections or not.

Overall, it appears FTX is heading towards a direction where all real world assets are offered alongside crypto. This could be the theme for the crypto space in general as crypto is becoming increasingly institutionalized and being offered on major exchanges like the New York Stock Exchange via Bakkt and the Chicago Mercantile Exchange (CME).

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