CME Group Planning to Launch Bitcoin Options Trading

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by Bhushan Akolkar · 3 min read
CME Group Planning to Launch Bitcoin Options Trading

After a massive demand for its Bitcoin Futures Contract this year, the CME Group is planning to introduce Bitcoin options contracts as per the internal source.

Back in December 2017 when Bitcoin was trading at its all-time high of $20,000, the CME Group was the first to launch Bitcoin Futures contracts in the market. As per the latest news, CME plans to bring yet another Bitcoin derivatives product in the market.

On Wednesday, September 4, The Block publication reported that the Chicago-based exchange plans to bring Bitcoin Options trading facility to its platform. One of the internal sources familiar with the matter said:

“I believe the launch is inevitable at this point.”

However, this time, CME won’t be the first exchange to provide the Bitcoin options contracts in the market. Amsterdam-based Deribit platform provides Bitcoin options trading facility. However, with giants like CME entering the game, it will open up the services to a massive number of institutional investors.

On the other hand, cryptocurrency exchange Binance recently acquired the derivatives platform JEX. According to industry reports, Binance plans to launch Bitcoin options contracts post the acquisition.

CME Group’s spokesperson revealed:

“We’re evaluating launching options on bitcoin futures, but can’t comment on specifics. We’re always talking with our clients and market users about new products and solutions that will help them to manage their price risk.

We launched bitcoin futures in 2017 in response to client demand, and any decision to launch new crypto products will similarly be driven by customer feedback.”

CME Registers Record-Trading for Bitcoin Futures

This year of 2019 saw a record jump in a number of Bitcoin Futures contract traded on CME after the crypto winter of 2018. The CME Group said that it has seen a huge trader-participation over the last few months for its Bitcoin Futures contracts.

In an email last month to Forbes, CME Group managing director and global head of equity products, Tim McCourt said: “Year-to-date, bitcoin futures are averaging 7,237 contracts per day, which is a 132% increase from the same period last year”. He also this as an exciting time for Bitcoin futures along with the overall crypto market. McCourt said:

“There is a lot of broad investor interest in cryptocurrency, as well as growing interest in a variety of applications for cryptocurrencies and blockchain technology. It will be interesting to see how this new market continues to grow and scale. For us at CME Group, a major focus is education, and making sure our customers have all the tools they need to make solid strategic decisions around crypto.”

Ever since the launch of Bitcoin Futures contracts in December 2017, May 2019 was the most successful month for the CME Group. McCourt explained:

“Trading an average of more than 13,600 contracts each day, equal to ~$515 million in notional value or 68K equivalent bitcoins. On May 13, BTC traded a record single-day volume of 33,677 contracts (168K equivalent bitcoin or $1.3B notional).”

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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