on Friday said it planned to launch options on its bitcoin futures contracts in the first quarter of 2020, the latest move by an established market player to expand into the crypto business. Chicago-based CME has offered bitcoin futures since December 2017, when the price of bitcoin in the spot market briefly traded as high as $19,800 during a wild bull market. These days the market has cooled significantly, but there is still a small but growing demand among institutional and retail traders for futures and options.
“The market has continually asked us for this since the bitcoin futures launch,” said
the head of equity index and alternative investment products at CME. Futures contracts allow traders to bet on whether the price of an asset will go up or down. Assuming it receives the necessary regulatory approvals, CME’s bitcoin options would give traders another avenue to hedging their bitcoin holdings, or betting for or against the currency’s moves. The CME’s announcement comes as rival
plans to launch its bitcoin futures product next week, the first product for its crypto-based platform, Bakkt. Though the two are obvious rivals, Mr. McCourt said the CME’s announcement was unrelated to ICE’s operations. “We’ve been looking at bitcoin options for a long time,” he said. CME and
Cboe Global Markets
both started selling bitcoin futures in 2017, but the latter eventually dropped its offerings earlier this year, ceding the market to CME. Every new product, from CME, ICE, and elsewhere, is another building block in what is expected to eventually be an institutional market for cryptocurrencies as their own asset class. There are about 3,300 individual accounts trading bitcoin futures at the CME, the company said. Roughly 7,000 contracts trade each day. That is a small slice of the 4.3 million contracts traded daily on the exchange across all its offerings, which include derivatives tied to energy, stock indexes and interest rates. —Alexander Osipovich contributed to this article.
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