The Chicago Mercantile Exchange (CME) Group announced on January 29 its intention to introduce options tied to its bite-sized Bitcoin 'Friday' futures.
CME and New Options
The options, which will settle in cash rather than spot Bitcoin, are set to begin trading on February 24, pending regulatory approval. They will complement CME’s existing suite of physically settled options on Bitcoin and Ether futures.
Trading Opportunities
Giovanni Vicioso, CME’s global head of cryptocurrency products, mentioned that 'these new options provide traders with even greater precision to manage short-term bitcoin price risk.' He also noted that the smaller size of these contracts, along with daily expiries, offers market participants a capital-efficient toolset to effectively adjust their bitcoin exposure.
Growth of Bitcoin Options
The Bitcoin Friday futures options add to an expanding array of options tied to cryptocurrencies in the US. In September, the US Securities and Exchange Commission approved the listing of options on iShares Bitcoin Trust ETF on Nasdaq. Bitcoin options are expected to accelerate institutional adoption and unlock 'extraordinary upside' for BTC holders.
The launch of CME’s new options reflects growing interest from retail investors in cryptocurrency derivatives and may further drive the development of the Bitcoin options market in the US.
