Kraken Launches Derivatives Trading for Professional Clients in the UK

Highlights:

• Kraken has launched crypto derivatives after testing the product with a small group.
• Derivatives now make up most of global crypto trading, with faster growth than spot markets.
• Kraken is planning further expansion after adding equity trading and buying new platforms.

Kraken, a cryptocurrency exchange based in the United States, has launched its derivatives trading platform for professional investors in the United Kingdom. The UK market is the second-largest market after the United States. The new service has been introduced gradually and is now fully open to clients who meet the required conditions and complete the designated onboarding process.

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Kraken’s head of derivatives, Alexia Theodorou, explained that the platform initially began by targeting a small group of clients during the early phase of the rollout. She stated that this measured approach allowed the company to test the system. Moreover, it ensured smooth integration before offering it to the full group of eligible clients. Theodorou also clarified that the service is strictly for professional clients as outlined by the Financial Conduct Authority in the United Kingdom.

Kraken has placed a significant focus on derivatives because they make up a large share of global cryptocurrency trading activity. Theodorou noted that derivative products are growing faster than spot trading. In addition, they are gaining increased attention from institutional investors.

Institutional Demand Strengthens Kraken’s Focus on Advanced Tools

The newly launched service operates through Kraken’s Multilateral Trading Facility, which is a platform managed by Crypto Facilities. Kraken was allowed to roll out new types of products, like multi-collateral perpetual contracts, to eligible clients in the United Kingdom after acquiring Crypto Facilities. These contracts enable clients to leverage a variety of different kinds of collateral and allow them more flexibility in managing their strategy.

Alexia explained that these tools are useful for institutional traders because they allow for advanced approaches such as hedging and neutral positioning in the market. These features offer more flexibility and efficiency for clients looking to move beyond basic trading options. She also noted that while derivatives are still at an early stage in the crypto sector, they dominate traditional financial markets in terms of trading activity. In those markets, the volume of derivatives often exceeds that of spot trading by a wide margin.

According to Theodorou, local restrictions have made some countries difficult for the exchange to enter. However, she pointed out that Kraken continues to expand by acquiring the necessary authorizations for future growth in various regions.

Kraken Targets Growth through Acquisitions and New Services

Kraken has recently completed the acquisition of an investment firm in Cyprus. The firm allows Kraken to offer trading in select countries in Europe. In addition, it acquired the U.S.-based trading platform NinjaTrader. These moves form part of the exchange’s plan to expand access to its derivatives services in other markets.

Kraken recently introduced stocks and ETFs for trading in the United States. The product introduced by the exchange is commission-free. Theodorou said that the company is now considering which locations to focus on next for rolling out its services through the proper licensing routes.