CME Group to Launch Bitcoin Options In 2020

September 20, 2019 | Digital Assets

CME Group, which introduced futures in bitcoin in 2017, will launch options on the digital currency in 2020.

CME Group’s bitcoin options will enable market participants to hedge or speculate on the cryptocurrency. The new product from CME is an acknowledgment of the increased trading and investing interest in bitcoin.

The bitcoin options will also be helpful to institutions and professional traders.  These players could, therefore, “manage spot market bitcoin exposure, as well as hedge bitcoin futures positions in a regulated exchange environment,” CME said.

Moreover, CME said the options were additional tools for precision hedging and trading.

CME Group’s bitcoin options to ride on the success of futures product

Additionally, CME provided some statistics on the bitcoin futures traded on the exchange:

  • Launched in December 2017
  • 20 successful futures expiration settlements till date
  • 3,300 individual accounts
  • On average, nearly 7,000 CME Bitcoin futures contracts trade every day, and
  • The number of large open-interest holders reached a record 56 in July 2019 (an indication of growing institutional interest)

CME Group’s bitcoin options: advantages

  • Track the regulated, robust CME CF Bitcoin Reference Rate (BRR)
  • No risk of counterparty default
  • Tools for risk management and trading strategies, and
  • Margin savings

However, the options will be available for trading only in the first quarter of 2020, pending regulatory approval.

CME Group’s bitcoin futures will have some competition Monday

ICE Futures US, one of the world’s largest commodity markets, will offer for trading Bakkt Daily and Monthly Bitcoin Futures.

However, these futures will be physically settled, the first such crypto product to trade on a regulated exchange.

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