In October, the business surpassed Binance as the largest bitcoin futures market in the world, and it aims to launch the options on March 28 subject to regulatory approval.
The new Micro Bitcoin and Micro Ether options contracts will be one-tenth the size of their respective underlying tokens, giving a wider range of market participants – from institutions to sophisticated, active, individual traders – more ways to manage their exposure to the two most valuable cryptocurrencies by market capitalization. These contracts will be a complement to the existing Bitcoin options contracts, which were established in 2020 and are sized at five bitcoins. Clients will also have the option of expressing long- or short-term views, with monthly, Monday, Wednesday, and Friday weekly options expiring.
“We have worked closely with clients and the broader industry to establish robust and liquid cryptocurrency futures and options markets at CME Group,” said Tim McCourt, Global Head of Equity and FX Products, CME Group. “At less than a year old, nearly 5.2 million combined Micro Bitcoin and Micro Ether futures contracts have changed hands. Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure.”
They are set to add to CME’s suite of micro bitcoin and micro ether futures, launched last year.
In May 2021, the exchange launched micro bitcoin futures, followed by ether contracts in December.
“Nearly 5.2 million combined Micro Bitcoin and Micro Ether futures contracts have changed hands in less than a year,” Tim McCourt, CME Group’s global head of stock and FX Products, said in a statement. “Micro-sized options will enable traders of all sizes to hedge market-moving events with greater precision and flexibility, or fine-tune their bitcoin market exposure,” he said.
CME announced a 20.5 million contract average daily volume in the fourth quarter of 2021, up 26% from the fourth quarter of 2020.
Options contracts give a trader the right, but not the responsibility, to purchase or sell an asset at a predetermined price at any time during the contract’s life. Unless the position is closed before the designated date, the buyer of a futures contract is obligated to acquire an asset on that date.