The advent of the Micro Ether Futures from CME Group is a move in the right direction towards attracting mainstream financial traders into the digital currency ecosystem.
American global markets financial derivatives service provider, CME Group Inc (NASDAQ: CME) has announced it will be launching a Micro Ether Futures (MEF) in a bid to expand its crypto derivatives offerings. As unveiled by the company, the product is pending regulatory approval, and it is designed to provide exposure as one-tenth of an Ether.
According to the CME Group, the MEF will offer a cost-effective way and efficient avenue to gain exposure to Ethereum-based futures for both institutional and retail investors. As with other regular futures products, the proposed product offering from the firm will help investors hedge their spot market positions. It can also aid investors to execute ether trading strategies, all while retaining the features and benefits of CME Group’s larger-sized Ether futures.
“Since the launch of Ether futures in February, we have seen steady growth in liquidity in these contracts, especially among institutional traders,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “At the same time, the price of ether has more than doubled since these contracts were introduced, creating demand for a micro-sized contract to make this market even more accessible to a broader range of participants. Micro Ether futures will offer even more choice and precision in how they trade Ether futures in a transparent, regulated, and efficient manner at CME Group.”
The CME Group said the futures products will be cash-settled, and is set to offer a complementary addition to the company’s “slate of more than 20 Micro products, which, together, have traded more than 1 billion contracts since their introduction.” These products include a Micro Bitcoin Futures that was floated back in May and has accumulated over 2.7 million contracts thus far.
Benefits of the CME Micro Ether Futures
The CME Micro Ether Futures offer a number of benefits to all of its proposed investors as detailed on the CME Group website dedicated to the new product.
Amongst the benefits highlighted is the ability to save potential margin offsets. Investors who place a premium on regulations will have no worries as the Chicago Mercantile Exchange allows all of its customers to trade on a regulated platform where all participants see the same prices and quotes on contracts settled to the CME CF Ether-Dollar Reference Rate.
A great deal of flexibility comes with the CME Group as investors can “trade electronically through CME Globex, bilaterally via blocks and EFRPs, or using Basis Trade at Index Close (BTIC) transactions.” In all, the Micro Ether Futures lets traders add precision to their strategies and scale positions up or down incrementally using contracts that are 1/500 the size of the larger Ether futures.
The advent of the Micro Ether Futures from CME Group is a move in the right direction towards attracting mainstream financial traders into the digital currency ecosystem.
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