Cryptocurrency derivatives exchange BIT on Wednesday rolled out options tied to Cardano's ADA token while promising to add more alternative cryptocurrencies (altcoins) in coming months.

The ADA options are live in the platform today and are denominated and settled in U.S. dollars, BIT said in a press release shared with CoinDesk. One ADA options contract represents 1 ADA, the exchange's spokesperson said.

ADA, the native token of Ethereum competitor Cardano, has a market value of $9.73 billion and is the world's eighth-largest cryptocurrency at press time. Alternative cryptocurrencies tend to be more volatile than the market leaders, bitcoin (BTC) and ether (ETH).

Options are derivative contracts that give the purchaser the right to buy or sell an underlying asset at a certain price on or before a specific date. A call option gives the right to buy the asset, while a put option gives the right to sell.

The availability of ADA options means traders can now use the options to hedge their portfolio risks or bet on a volatility explosion, as they have been doing with bitcoin and ether options.

With BIT's unified margin system, traders can use their coin holding as collateral to trade ADA options at a discount.

"BIT's unified margin system allows users to utilize all assets in their accounts as trading collateral with a haircut ratio. ADA's haircut ratio is now 15%, meaning users can use their ADA as collateral and trade options at a 15% discount," BIT said in the release.

The offering, launched in collaboration with strategic partner Darley Technologies and market maker DWF Labs, expands BIT's existing suite of options, which include those tied to the decentralized layer 1 blockchain, The Open Network's TON coin and bitcoin and ether futures and options.

BIT said it plans to offer options to other altcoins, including meme coins, in the future.

The global crypto options market, led by Panama-based Deribit exchange, is already worth billions of dollars, with most of the activity concentrated in bitcoin and ether contracts, and is known to influence the spot prices of the top cryptocurrencies.

Cardano ADA Options Derivatives

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.