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Derivatives Giant Sets Launch Date for Bitcoin Options As Clients Show Growing Interest in BTC Hedge

November 12, 2019

The Chicago Mercantile Exchange (CME) Group, one of the world’s largest derivatives marketplaces, has set a launch date for options on its Bitcoin (BTC) futures contracts following an initial announcement in September.

According to a release, the BTC options are scheduled to be tradable beginning January 13, 2020, pending regulatory approval.

Options on a futures contract allow the holder to buy or sell a specific futures contract at a strike price on or before the option’s expiration date – without any expressed obligation to do so. The move marks the further financialization of Bitcoin in the form of traditional investment vehicles.

Tim McCourt, CME Group global head of Equity Index and Alternative Investment Products, says,

“Since the launch of our Bitcoin futures nearly two years ago, clients have expressed a growing interest in options as another way to hedge and trade in these markets.

We have worked closely with clients and the industry to establish a robust and increasingly liquid underlying futures market here at CME Group, and we believe Bitcoin options will now offer our customers greater precision and flexibility to manage their risk.”

Since their introduction in December 2017, traders have increasingly been acquiring Bitcoin futures contracts, the CME Group reports. An average of 6,500+ BTC futures contracts per day, worth around 32,500 BTC, have been traded this year. 

Bakkt, the Wall Street-based Bitcoin trading platform, is also planning to roll out options. CEO Kelly Loeffler announced that Bakkt, which has been gaining steam after a slow start, will launch the first regulated options on its Bitcoin futures on December 9th.

[GoogleDTR]

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