CBOE revolutionizes the market: leveraged Bitcoin futures trading from January

News: CBOE will introduce leveraged Bitcoin futures trading starting in January.

This move consolidates CBOE Digital’s position as the first regulated crypto exchange in the United States, offering a unified platform to facilitate spot and leveraged derivatives trading. See below for full details.

CBOE redefines the Bitcoin futures landscape

As anticipated, CBOE Digital recently announced its plans to introduce margin futures trading and clearing on Bitcoin, beginning January eleventh, 2024.

This initiative positions CBOE Digital as the first regulated exchange in the United States focused on facilitating spot and leveraged derivatives trading on a unified platform.

The initial offering will include financially regulated margin contracts on Bitcoin, with the goal of diversifying the product range to include physically delivered products in the future, subject to the necessary regulatory approvals.

This margin model is designed to improve capital efficiency by allowing clients to participate in futures trading without the requirement to pledge the entire collateral up front.

In addition, the unified spot and derivatives trading platform provided by CBOE Digital aims to simplify clients’ access to both markets, opening up opportunities to increase capital and improve operational efficiency.

All companies in support of CBOE Digital

The upcoming launch of futures on margin will be supported by several companies in the cryptocurrency and traditional finance sectors, including B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos, tastytrade, Trading Technologies, and Wedbush.

CBOE Digital President John Palmer expressed gratitude for the support of industry partners, stating that the upcoming launch represents a significant milestone for CBOE Digital.

He also highlighted the support of a remarkable group of partners who share a commitment to building reliable and transparent crypto marketplaces. Palmer indicated that offering futures on margin is a key step in expanding access to hedging tools in digital asset markets.

The launch plan is in tune with CBOE Digital’s current offerings, which include Bitcoin, other cryptocurrencies, and stablecoin trading on its cryptocurrency spot market.

Contractual margin requirements for new futures will be made public daily on CBOE Digital’s website, accompanied by risk parameter files compatible with standardized portfolio risk analysis (SPAN) for replicable margin calculations.

Record Open Interest in Bitcoin futures: all the growth trends

Over the past few days, Open Interest in Bitcoin futures has risen significantly, following the positive price trend of BTC.

On Nov. 10, according to data from Glassnode, Open Interest for Bitcoin futures on the CME hit a new record high, reaching $4 billion, corresponding to 27% of total Open Interest.

In addition, Coinglass data reported that on 10 November, the total volume of Open Interest in Bitcoin futures exceeded $16 billion across all exchange platforms.

Looking at Open Interest Futures on the CME, we see that on 10 November it had reached about $4.06 billion, later rising to about $4.19 billion.

Binance followed closely, recording an Open Interest of $3.84 billion on 10 November, securing its position as the exchange with the second highest Open Interest.

Recall that in the context of Bitcoin futures, Open Interest represents the total number of contracts not yet settled in the market. It thus indicates the cumulative number of contracts that are open but yet to be closed through an opposite transaction.

An increase in Open Interest suggests an influx of capital into the market, with new positions being created, often indicating growing interest or confidence in the current trend.

Conversely, a decrease in Open Interest might indicate that traders are closing their positions, suggesting a potential reversal or weakening of the current trend.