The United States subsidiary of the crypto exchange giant FTX, FTX US, is reportedly planning to offer stock options trading following the launch of stock trading service for investors in all 50 American states.
Sam Bankman Fried’s FTX aims to expand itself to become an ultimate solution to all kinds of trading, and the latest plan aligns with the goal.
During an interview with Bloomberg, Brett Harrison, the president of FTX US, said that the company will add options. However, he did not provide any specific timeline for the launch. Harrison believes that the expansion plans to intensify its product offerings during the slowdown in trading across assets will allow the company to “capitalize on that opportunity” during a future bull cycle.
According to a representative from FTX, the introduction of options is currently pending regulatory review.
Options are financial contracts that provide the buyer with the option to acquire an asset at a defined price at some point in the future. These contracts are used as a tool to speculate on a particular asset or to hedge an underlying position.
Unclear relationship between FTX and Robinhood
These types of offerings constitute a significant portion of Robinhood’s business. The company is well-known for its controversial practice of “payment for order flow,” in which institutional trading firms pay Robinhood for the privilege of unloading consumer orders.
When asked for his opinion on the possibility of a relationship between FTX and Robinhood, Harrison declined to provide one. The co-founder of FTX, Sam Bankman-Fried, who has revealed a 7.6 percent ownership in Robinhood, was quoted earlier as saying that he is “excited about Robinhood’s business prospects and potential ways we could partner with them.”
During the most active period of the market, Robinhood generated roughly $70 million in options transactions for order flow, compared to $49 million in PFOF from trading in stocks that are not included in the S&P 500.