Zinger Key Points
- CME's new options will complement their existing physically-settled crypto options, offering investors additional risk management options.
- The crypto industry has responded positively to these new contracts, as they will provide more granularity for their trading needs.
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Global derivatives marketplace CME Group Inc CME on Wednesday announced the upcoming launch of options on its Bitcoin BTC/USD Friday futures contracts, pending regulatory approval.
These new contracts are set to be the first financially-settled cryptocurrency options offered by CME Group with daily expiries available Monday through Friday, aiming to provide traders greater flexibility for managing short-term Bitcoin price risk.
According to a release, the new options on Bitcoin Friday futures are designed to complement CME Group’s existing suite of physically-settled options on Bitcoin, Ether ETH/USD, Micro Bitcoin and Micro Ether futures.
These new contracts are a tool for traders to manage short-term Bitcoin price risk with the smaller contract size and daily expiries.
Giovanni Vicioso, CME Group Global Head of Cryptocurrency Products said, “We are pleased to offer these new options that provide traders with even greater precision to manage short-term bitcoin price risk.”
“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,” he added.
Also Read: Coinbase Taps Trump’s Campaign Manager, Chris LaCivita To Tackle Crypto Policy In Washington
These contracts have been met with favorable opinions from those in the digital asset space.
Joshua Lim, Global Co-head of Markets at FalconX said, “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.
Jason Urban, Global Head of Trading at Galaxy, noted that these contracts offer a flexible and cost-effective way for our trading desk to optimize risk management and provide tailored solutions to our counterparties navigating bitcoin price volatility.
The release also said that Bitcoin Friday futures have become CME Group’s most successful cryptocurrency product launch, with more than 775,000 contracts traded since its launch on September 29 and an average daily volume of 9,700 contracts. 44% of the contracts are traded during non-U.S. trading hours.
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