CME Group to Launch Bitcoin Options in Q1 2020
- The Chicago-based exchange is aiming to provide its clients with “additional tools for precision hedging and trading” with its new Bitcoin options.
- Since the launch of its Bitcoin futures in 2017, the exchange has seen 20 successful futures expiration settlements and more than 3,300 individual accounts trading the contracts.
Illustration from Freepik
The Chicago Mercantile Exchange (CME) Group is planning to add options to its Bitcoin futures contracts some time in the first quarter of 2020, the company announced in a press release on 20 September.
According to the announcement, the launch of Bitcoin options is aimed at providing CME’s clients with “additional tools for precision hedging and trading”, even though the launch is still pending regulatory review. CME Group’s Head of Equity Index and Alternative Intestment Products, Tim McCourt, said in the press release:
“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.”
The press release also stated that, since the launch of its Bitcoin futures in 2017, the exchange has seen 20 successful futures expiration settlements, and more than 3,300 individual accounts trading the contracts. The company also added that since the beginning of 2019, close to 7,000 CME Bitcoin futures contracts, which is roughly 35,000 BTC, have been traded each day.
Bakkt, on the other hand, is planning to launch physically-delivered Bitcoin futures, meaning customers will receive actual Bitcoin, in response to the CME and CBOE cash-settled Bitcoin Futures. It recently revealed the initial margin requirements for its Bitcoin futures contracts, and announced that the Bakkt Warehouse has started accepting customers Bitcoin deposits and withdrawals.
- One of the main points of the complaint is that Gemini provided misleading information on how susceptible to manipulation the BTC futures contract could be.
- The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, injunctions relating to registration and trading, and an injunction against further violations of the Commodity Exchange Act.
Gemini founders Tyler Winklevoss (L) and Cameron Winklevoss (R) onstage during TechCrunch Disrupt, New York, May 6, 2015. Noam Galai/Getty Images for TechCrunch
- Genesis Global Trading, Cumberland, and Akuna Capital will be providing liquidity for CME Group’s new crypto investment vehicle.
- The new micro BTC and ETH options, expected to start trading on 28 March, will allow for a wider range of market participants to manage their exposure.
- While the pilot will be limited to certain Quiznos locations in the city, customers will be able to receive a $15 BTC reward for paying with Bitcoin.
- The pilot was made possible through a partnership with Bakkt, and could be expanded to other locations in the country should it be successful.