CME Group has become the leading global derivatives market. announced Plans to launch options on Bitcoin Friday Futures beginning February 24 pending regulatory approval. CME Group will introduce its first financial settled cryptocurrency option contracts on February 24. These options expire every business day from Monday to Friday.
Cash-settled or financial-settled contracts are derivatives where settlement is not made by physical delivery. The profit or loss is instead calculated by comparing the strike price to the current market value of the asset. This amount is paid out in cash.
“We are pleased to offer these new options that provide traders with even greater precision to manage short-term bitcoin price risk,” Giovanni Vicioso is the Global Head for Cryptocurrency Products at CME Group. “Building on the success of our Bitcoin Friday futures, the smaller size of these contracts, along with daily expiries, offer market participants a capital-efficient toolset to effectively adjust their bitcoin exposure.”
CME Group said these financially-settled options will enhance its lineup of other cryptocurrency derivatives, which already includes physically-settled options on Bitcoin and Micro Bitcoin futures.
“Given the increasing density of tradable catalysts in crypto, CME Group’s new option suite on Bitcoin Friday futures provides the granularity that market participants need for hedging and expressing nuanced views on Bitcoin,” Joshua Lim is the Global Co-Head of Markets for FalconX.
Bitcoin Friday Futures, which were launched on September 29th, have been the most popular cryptocurrency product of CME Group. Over 775,000 contracts are traded each day and an average volume is 9,700. It is noteworthy that 44% of all trades were made during hours other than US time, showing the global nature of demand.
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Source: bitcoinmagazine.com
