Cryptocurrency asset manager, LedgerX announced today on its Twitter account the launch of the LedgerX Volatility Index (LXVX) for Bitcoin (BTC). The LXVX aims to help investor in making their trading strategies in the Bitcoin market. The index will be based from LedgerX’s option marketplace.
— LedgerX (@ledgerx) January 14, 2019
As a review, LedgerX is a cryptocurrency asset manager being regulated by the United States Commodity Futures Trading Commission (CFTC). This adds more credibility and reliability to the LXVX.
During a press interview, LedgerX CEO ,Paul Chou, said that the LXVX will show bitcoins upside and downside movement. This will enable traders to gauge how much they can lose or gain over the next month. In short, the index will serve as risk management tool for individual and institutional traders.
When asked for further details about LXVX, specifically some documentation to explain the rationale, Chou said that they are preparing a white paper on LXVX and it be available soon. He also added that as of now, the index is focused only on US-regulated option exchanges. As such it may or may not comply with EU regulations.
they are not our primary regulator so not sure either way, but will check. disparities in global regulatory regimes always a challenge, especially in a space like this.
LedgerX will not charge traders for the use of the LedgerX Volatility Index. The company is also open to the possibility creating new products which are going to tie with the volatility index. This could be in the form of a new derivatives that can be traded, similar to how the stock market allows volatility index options and futures to be betted on by investors.
The LedgerX Volatility Index (LXVX) is live now on the LedgerX website. It aggregates index data into daily, weekly, monthly and 3 months. You might want to check it out to see how Bitcoin is fairing in terms of volatility.