Copy link
Increase text size
Decrease text size
Link copied

CME publishes specifications of planned bitcoin options contracts

Thu, 31 Oct 2019, 12:33 pm UTC

Following its initial announcement to launch bitcoin options contracts in Q1 2020, derivatives marketplace CME Group has now revealed the specifications.

According to the details published Wednesday, each options contract would be based on one of CME’s bitcoin futures contracts, which comprises of five bitcoin per contract, CoinDesk reported. The contracts would be quoted in U.S. dollars per one bitcoin.

The minimum price fluctuation for a regular tick is 5 index points (equal to $25), for premium greater than 25 index points, while the minimum price fluctuation for a reduced tick is one index point, (equal to $5) for premium at or below 25 index points.

“CME options on bitcoin futures settle into 1 bitcoin futures contract upon termination of trading,” CME said.

The contracts would trade from 5:00 P.M. Central Time (CT) Sunday to 4:00 P.M. CT Friday. The launch, however, is subject to regulatory approval.

CME said that its plan to launch bitcoin options contracts is driven by customer demand for additional bitcoin trading tools.

In a recent interview, Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products, explained that the bitcoin options contracts will give holders the right, but not the obligation, to purchase or sell the underlying futures contracts at maturity.

“It’s very similar to the way other options in the marketplace work. The difference here is the underlying, or the deliverable, of the options contract, is a CME Group Bitcoin future,” he said (as quoted by Cointelegraph).

McCourt said that these new products will help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment.

Meanwhile, Bakkt, which went live with its bitcoin futures trading platform in September, has also revealed that it will be launching options contract for bitcoin futures on December 09, 2019. CEO Kelly Loeffler said that the launch is driven by customer feedback, adding that the bitcoin options contracts have been designed to “hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies.”

TokenPost | [email protected]

<Copyright © TokenPost. All Rights Reserved. >

To leave a comment, please sign in.
  • Bitcoin (BTC) $8,685.52 (-4.93%)
  • Ethereum (ETH) $165.51 (-6.05%)
  • XRP (XRP) $0.224600 (+0.84%)
  • Bitcoin Cash (BCH) $331.43 (-4.86%)
  • Bitcoin SV (BSV) $268.37 (+4.56%)
  • Bitcoin (BTC) $8,685.52 (-4.93%)
Jan 17, 2020 (Friday)
Crypto Technicals: Major Cryptocurrency Support Resistance Levels
Crypto Technicals: Major Cryptocurrency Daily Technical Outlook
Crypto dealer SFOX announces new service for investors and wealth managers
Binance in talks with TaoTao and Z Corporation for strategic partnerships in Japan
Crypto Technicals: NEO/USD set to scale new highs, 200-DMA breakout confirms bullish trend
Crypto exchange Gemini launches own insurance company "Nakamoto"
eToro, Radar and OKCoin join Coinbase-led Crypto Rating Council
Huobi joins Blockchain Turkey Platform (BCTR)
U.S. authorities urged to investigate crypto use in funding domestic terrorism and extremism
Calibra, Anchorage, Bison Trails executives elected to Libra’s new technical steering committee
Crypto Technicals: LTC/USD bounces off 5-DMA support, eyes next major hurdle at 200-DMA (65.43)
U.S. lawmakers seek tax exemption for crypto transactions under $200
Former CFTC Chair launches Digital Dollar Project in partnership with Accenture
Crypto Technicals: ETH/USD resumes upside after brief pause, eyes 23.6% Fib at 174.83
Uzbekistan to launch national mining pool and licensed cryptocurrency exchange
Crypto Technicals: BTC/USD extends sideways below 200-DMA, bias bullish
Garanti BBVA conducts real-time blockchain transfers using Takasbank's BiGA Platform
Jan 16, 2020 (Thursday)
Crypto Technicals: Major Cryptocurrency Support Resistance Levels
Crypto Technicals: Major Cryptocurrency Daily Technical Outlook
Litecoin Foundation, BlockFi partner to bring more liquidity to users
Subscribe to the TokenPost newsletter!
Don't show me this again today.
Back to top
Copyright ⓒ TokenPost. All Rights Reserved.