The CME Group, a world leader in the derivatives market, today announced that it will introduce options on its bitcoin futures contracts from January 13th, 2020, pending regulatory confirmation.
According to the report, it seems that the bitcoin futures contracts launched almost two years ago on the platform have led the CME today to want to increase diversification in the field of digital gold derivatives, thus adding options on bitcoin.
Confirming this theory is Tim McCourt, global leader of the stock index and alternative investment products of the CME Group, who said:
“Since the launch of our Bitcoin futures nearly two years ago, clients have expressed a growing interest in options as another way to hedge and trade in these markets. We have worked closely with clients and the industry to establish a robust and increasingly liquid underlying futures market here at CME Group, and we believe Bitcoin options will now offer our customers greater precision and flexibility to manage their risk”.
To justify this choice, the derivatives market giant highlights key points recorded following the launch of its bitcoin futures in December 2017, when BTC’s price reached its all-time high.
Only in 2019, in fact, the average daily volume reported was over 6,500 contracts, equivalent to 32,500 bitcoins.
Not only that, in June 2019 the CME reached a new record for the popularity of its bitcoin futures with a historical high between demand and number of contracts traded. The number of contract holders of more than 25 BTC had grown from an average of 46 to 49.
It is likely that the rise in June was also due to the transition period of that time. On the one hand, its main competitor CBOE had stopped issuing new bitcoin futures contracts and, on the other, the new futures contracts issued by Bakkt were still pending.
In any case, the CME Group continues to announce that it is the only derivatives platform where customers can hedge or trade reference futures options in any asset class in which they can invest, with an average daily volume of options of 4.3 million contracts in 2019.
In another post, the CME specifically describes the incoming new product, which shows that each option would be used on one of the bitcoin futures contracts representing 5 bitcoins. In addition, the quote is in US dollars per bitcoin with a tick size of $25 (or $5 for small tick sizes).