CME Group Is Launching Bitcoin Options Early in 2020

Daniel Palmer

Derivatives marketplace CME Group has announced that it will offer options on its bitcoin futures contracts starting in the first quarter of next year.

The Chicago-based company first launched its futures product back in December 2017, at the same time as its Windy City rival, the Chicago Board Options Exchange (CBOE).

In its announcement on Friday, CME said the launch of bitcoin options is aimed to provide clients with “additional tools for precision hedging and trading.” The launch is pending regulatory review.

Related: Gemini Exchange Data Is Being Added to CME’s Crypto Indices

Tim McCourt, CME Group global head of equity index and alternative investment products, said:

“Based on increasing client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk. These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment.”

The firm detailed that, since the 2017 launch, it has seen 20 “successful” futures expiration settlements, with over 3,300 individual accounts trading the contracts. Close to 7,000 CME bitcoin futures contracts are traded on average each day, the firm added.

In March 2019, CBOE abruptly changed tack and halted the futures product. That left CME as the sole provider of bitcoin futures in the U.S.

Related: Coinbase Shutters High-Speed Crypto Trading Division, Axing 30 Jobs

CME will have a new rival from on Monday, however, when the Intercontinental Exchange and its subsidiary Bakkt begin offering a new futures product. Unlike CME’s cash contracts, though, ICE will be offering a physically settled product, meaning customers will receive actual bitcoin instead of the cash equivalent.

Tim McCourt image via CoinDesk archives

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