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(Kitco News) – CME Group, the operator of the world’s largest derivatives exchange, has announced that it plans to expand its suite of cryptocurrency options across its standard- and micro-sized (BTC) and Ether (ETH) contracts, pending regulatory approval.
According to the press release, the new contracts, which are set to go live on May 22, will offer expires every day of the business week, Monday through Friday.
“We are pleased to offer these new options contracts to provide market participants with greater precision and versatility in managing short-term bitcoin and ether price risk,” said Giovanni Vicioso, CME Group’s global head of cryptocurrency products. “Against a backdrop of heightened market volatility in the digital asset sector, we continue to see clients turn to a trusted, regulated venue like CME Group for reliable and efficient cryptocurrency risk management products.”
The new expiries for options on Bitcoin and Ether futures will be offered with Monday, Tuesday, Wednesday, Thursday, and Friday expirations. Additionally, options on micro-sized Bitcoin and Ether futures will “add Tuesday and Thursday expiries to their existing Monday, Wednesday and Friday contracts,” CME Group said.
The new offerings were created to complement the existing monthly and quarterly expiries currently available across all Bitcoin and Ether options on futures contracts.
“CME Group continues to innovate and lead in the institutional crypto options on futures market,” said Paul Eisma, head of options trading at XBTO. “By completing the short end of the implied volatility surface with the addition of the new Tuesday, Thursday Micro options contracts and weekly standard size contracts, institutional market makers such as XBTO can deliver precise liquidity to market participants of all sizes who trade and hedge cryptocurrency exposures spanning every business day of the upcoming week for the first time.”
Following an abysmal year in the crypto market that saw more than $2 trillion in value wiped from the total market cap, 2023 has gotten off to a strong start for the ecosystem, and CME Group is looking to capitalize on the resurgence in interest.
Through the first quarter of 2023, CME Group’s Bitcoin and Ether futures and options complex hit a record daily average notional of more than $3 billion, the company wrote, “signifying an increase in client demand for liquid hedging tools.”
According to the latest data from CME Group, the average daily volume (ADV) for Bitcoin futures and options in Q1 exceeded 11,500 contracts while open interest (OI) averaged a record 24,094 contracts. There were a record 2,357 Bitcoin options contracts traded on March 22, and OI reached a record 14,700 contracts on March 31.
This development comes as CME Group has steadily been rolling out various cryptocurrency-related products and services.
In August, CME Group announced the launch of Euro-denominated Bitcoin and Ether futures. Then in September, the firm revealed the launch of Ether options contracts just three days before ‘The Merge,’ which transitioned Ethereum from proof-of-work to proof-of-stake, was implemented. Since the launch, more than 4,600 Ether options contracts have been traded, with a record 311 contracts traded on February 22 and a record OI of 1,800 contracts reached on March 24.
Last month, the CME Group launched Bitcoin futures events contracts, giving traders access to daily options on futures that are valued up to $20 per contract and enabling them to know their maximum profit or loss when entering a trade.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
