The Chicago Mercantile Exchange today confirmed the date of the release of bitcoin futures options on January 13, 2020, According to The Finances on Tuesday (November 12). Bitcoin options on the Chicago Mercantile Exchange are currently under review by regulators, which have confirmed that they will go public once regulators approve them.
“We’ve worked closely with our clients and the industry has reached more liquidity in the Chicago Mercantile Exchange futures market,” said Tim McCourt, director of index and derivatives products at the Chicago Mercantile Exchange. We believe that Bitcoin options can now provide our customers with more precision and flexibility to manage risk. ”
The timing chosen by the Chicago Mercantile Exchange is interesting because one of its main rivals, Intercontinental Exchange’s Baxter, plans to issue a similar product by the end of the year.
Baxter has announced that the relevant bitcoin futures products will be physically delivered, while the Chicago Mercantile Exchange will deliver in cash.
The Chicago Mercantile Exchange offered more details about the upcoming cryptocurrency derivatives two weeks ago. Its Bitcoin options will be priced at CME Bitcoin Reference Rate. The index, which cites pricing data from several cryptocurrency exchanges, currently includes all bitstamp, Coinbase, itBit, Kraken and Gemini.
The Chicago Mercantile Exchange stresses that the advantage of options is that margin can be reduced by gold-to-pin.
The Chicago Mercantile Exchange also provided updated data on Bitcoin futures, saying that the average number of contracts traded daily in 2019 was more than 6,500 (equivalent to about 32,500 bitcoins). Trading so far this year is almost double the volume of trading in 2018.
“Since the release of our Bitcoin futures nearly two years ago, customers have become increasingly interested in using options to hedge risk in these markets. McCourt added.