DBS Bank Will Start Offering OTC Crypto Options and Structured Notes in Q4

Singapore’s largest bank, DBS, will soon start offering over-the-counter (OTC) crypto options trading and structured notes for eligible institutional investors and accredited wealth clients. According to a press release, trading for these products is expected to begin in the year’s fourth quarter.

Crypto options are a form of derivative contract that gives investors the right to buy or sell a specified cryptocurrency at a predetermined price and date. These financial instruments offer a unique way for investors to profit from market movements without owning the underlying assets. 

On the other hand, structured notes are debt securities that combine features of bonds and derivatives. Their returns are linked to the performance of an underlying asset.

DBS to Launch Bitcoin and Ether Options

According to DBS, the soon-to-be-launched financial products will be specifically linked to the price of bitcoin (BTC) and ether (ETH), the two largest cryptocurrencies by market value.

DBS stated that eligible clients who custody their BTC and ETH with the bank can now “hedge” their positions against market volatility and potentially earn yield using various options structures.

The bank added that those seeking to manage the volatility of BTC may buy a put option. In this case, a put option will give clients the right to sell BTC at a fixed price at a future date, even if the digital asset falls below the set price at the predetermined date.

Expanding Exposure to Crypto

DBS said that while clients continue to increase their crypto portfolios by trading digital assets through the bank’s dedicated crypto exchange platform, clients can now build more exposure to crypto through the latest offering.

Jacky Tai, DBS head of trading and structuring, noted that this offering comes amid rising demands from professional investors allocating crypto to their portfolios.

“Professional investors are increasingly allocating to digital assets in their portfolios. Underpinned by DBS’ strong credit ratings and longstanding expertise in structuring solutions, these financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem,” he said.