How option and future trading Affects Volatility of underlying asset
Options and future trading of any asset provides ability to traders to design hedging strategies against future events and expectations. The traders are not panicked to either buy or sell in rush as they already have their positions covered through options and futures. This in case of happening of any unwanted event does provide them cushion and thereby reducing volatility of underlying asset.
In crypto assets - future trading was available for BTC and ETH now for sometime on some exchanges like Bitfinix.
And lately options trading has also become possible on LedgerX and Deribit. Although volume is low but slowly it is expected to grow providing cushion to traders.
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This in case of happening of any unwanted event does provide them cushion and thereby reducing