Recently, The Chicago Mercantile Exchange (CME) Group, the world’s outstanding and most assorted derivatives market place, reported that it would initiate options on its Bitcoin futures contracts in the first quarter of 2020, pending regulatory audit. This development was declared in a recent news release.
CME Group Global Head of Equity Index and Alternative Investment Products, Tim McCourt, said –
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, 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.
Moreover, CME Group‘s declaration takes note of that, from the beginning of the launch of Bitcoin futures on the trade-in December 2017, there were 20 effective futures expiration settlements, exceeding 3,300 individual accounts exchanging the product. From the beginning of the financial year to till date, it revealed 7,000 CME Bitcoin futures contracts which are roughly about 35,000 BTC, have exchanged on an average every day.
Besides, CME Group is the sole derivative market place where clients can support or trade benchmark choices on futures over each investable resource class, with a daily average volume of 4.3 million in 2019. Further, by initiating Bitcoin options, the organization is giving customers extra tools for accurate trading and hedging.
Regardless, CME’s Bitcoin futures market has been picking up in exchanging volume all through 2019, another excuse behind why the exchange will extend its Bitcoin-related service. CME announced that it is observing some of its leading daily exchanging volumes since its introduction from 2017. In the current year alone, it has doubly increased its exchanging volume. A few weeks back, CME assessed on an average, around 370 million dollars was being exchanged over 7,237 contracts every day from the start of 2019.
Additionally, CME is likely to expand its Bitcoin-related market places, given that Bakkt will be launching Bitcoin futures market place sooner, which is set to be the first to provide daily and monthly futures in real BTC. The common challenge among institutional investors was a concern in the CME’s recently reported venture into Bitcoin options exchanging.
Even though, Bakkt’s futures offering was held-up past expectation over the company’s impediment in fulfilling the necessities of U.S. regulators, especially the Commodity Futures Trading Commission (CFTC), which inspected the platform in 2019 July.