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Highlights
- The CME Group is one of the world’s largest derivatives exchanges.
- Last year, the exchange overtook Binance as the world’s largest bitcoin futures platform.
- CME’s average daily volume of its futures contracts jumped by 26% YoY to 20.5 million in Q4.
Derivatives exchange CME Group Inc plans to offer options trading in micro Bitcoin and Ether, equivalent of one-tenth their underlying size, to both institutional and individual traders later this month.
According to Reuters, the exchange plans to launch the options on March 28, subject to regulatory approval. Bitcoin and Ether are the world’s two biggest cryptocurrencies based on market capitalization.
Last year, the CME Group had launched the micro versions of Bitcoin and Ether futures. The futures contracts require holders to buy or sell the asset on a fixed date. Traders use the contracts to protect themselves against big price swings in shares or speculate on the price.
Despite the growing popularity of cryptocurrencies, the market has swung wildly this year as the central banks moved to end the pandemic-era fiscal stimulus and raise the interest rate to tame price rise.
In October last year, the GME Group overtook Binance as the world’s largest Bitcoin futures platform. The new contracts will add to its micro Bitcoin and Ether futures collection launched in May last year.
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Micro-sized options to hedge volatility risk
In a statement, the CME Group’s global head of equity and FX Products, Tim McCourt, said that nearly 5.2 million micro Bitcoin and Ether futures contracts exchanged hands in less than a year.
McCourt noted that the “micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure.”
In the fourth quarter of 2021, CME’s average daily volume of its futures contracts jumped by 26% year-on-year to 20.5 million.
Bitcoin was up 6.31% to US$43,504.23 at 12:31 pm ET, while Ether rose 3.96% to US$2,918.34 at the same time on Tuesday. The global crypto market was up 4.81% to US$1.91 trillion in the last 24 hours.
