World’s leading and most diverse derivatives marketplace, CME Group Inc. will offer options on its bitcoin futures contracts starting in the first quarter of next year.
The CME Group owns large derivatives, options and futures exchanges in Chicago and New York City using its CME Globex trading platforms. It also owns CME Clearing which provides settlement and clearing of exchange trades.
The Chicago-based derivatives marketplace CME Group first launched its futures product back in December 2017, at the same time as its Windy City rival, the Chicago Board Options Exchange (CBOE). In its announcement on September 20, CME said the launch of bitcoin options is aimed to provide clients with “additional tools for precision hedging and trading.” The launch is pending regulatory review.
Based on increasing client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk. These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment, CME Group global head of equity index and alternative investment products Tim McCourt said.
Since the 2017 launch, it has seen 20 successful futures expiration settlements, with over 3,300 individual accounts trading the contracts. Close to 7,000 CME bitcoin futures contracts are traded on average each day, the company added.
In March 2018, just months after it had started offering futures for bitcoin, CBOE abruptly changed tack and halted the product that left CME as the sole provider of bitcoin futures in the U.S.
However, CME will have a new rival from September 23, when the Intercontinental Exchange and its subsidiary Bakkt begin offering a new futures product. Unlike CME’s cash contracts, though, ICE will be offering a physically settled product, meaning customers will receive actual bitcoin instead of the cash equivalent.