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CME Group to launch bitcoin options in Q1 2020

Mon, 23 Sep 2019, 04:41 am UTC

Leading derivatives marketplace CME Group has revealed its plans to launch options on its Bitcoin futures contracts in the first quarter of 2020.

CME Group launched CME Bitcoin Futures back in December 2017. Since then, there have been 20 successful futures expiration settlements and more than 3,300 individual accounts have traded the product. Moreover, around 7,000 CME Bitcoin futures contracts (equivalent to about 35,000 bitcoin) are traded on average each day, according to a press release.

At the same time, institutional interest is also growing with the number of large open interest holders reaching a record 56 in July, it added.

CME Group said that it is launching Bitcoin options to provide clients with additional tools for precision hedging and trading. The launch is pending regulatory review.

"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," said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. "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."

CoinDesk noted that after CBOE abruptly halted its futures product, CME became the sole provider of bitcoin futures in the U.S.

However, CME is to face competition from a new rival, starting today. Bakkt, the subsidiary of the Intercontinental Exchange, went live today with its bitcoin futures trading platform. However, unlike CME’s cash-settled futures contracts, Bakkt is offering physically-settled product, meaning that clients will receive actual bitcoin.

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