CME Group To Offer Micro Bitcoin and Ethereum Options 


Key Takeaways

  • The CME’s micro Bitcoin and Ethereum options are expected to launch on the 28th of this month.
  • These micro options seek to open the market to participants who prefer a much smaller sizing.
  • The CME already has micro Bitcoin and Ethereum futures contracts available for trading.

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The world’s largest futures and options exchange by daily volume has announced its plans to offer micro Bitcoin and micro Ether options starting March 28, 2022.

New Options Contracts at One-Tenth of their Standard Sizes

The Chicago Mercantile Exchange (CME) is set to launch trading of micro Bitcoin and micro Ethereum options contracts on Mar. 28th, pending regulatory evaluation.

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According to a Tuesday press release published by CME Group, the new micro options contracts will be one-tenth of their respective underlying tokens in size and will cater to a wide range of market participants, including institutions and individual traders.

Rob Strebel, Head of Relationship management at DRW, said that the product would “help attract new investors and grow the crypto ecosystem.” 

CME has long offered BTC futures and diversified its offering to include ETH futures in March 2021. The new product offers a new way for traders to get exposure to the two leading crypto assets.

Futures contracts are derivative instruments in which two participants engage in a deal to buy or sell a certain asset (usually a commodity), at a predetermined future date and price. They’re often used to hedge the price movement of the underlying asset to help prevent losses from unfavorable price changes.

Similarly, micro futures contracts work exactly like a regular futures contract; however, the CME Group applies one-tenth the multiplier of a standard contract. 

These contracts will offer the opportunity to have long or short exposure to the underlying BTC or ETH. Contracts will expire monthly as well as weekly. 

Tim McCourt, Global Head of Equity and FX Products at CME Group, disclosed:

“We have worked closely with clients and the broader industry to establish robust and liquid cryptocurrency futures and options markets at CME Group. At less than a year old, nearly 5.2 million combined Micro Bitcoin and Micro Ether futures contracts have changed hands.”

In February 2021, the CME Group announced the initial launch of derivative instruments based on the underlying value of a cryptocurrency, specifically ETH futures. Later that year, on Dec. 6th 2021, the exchange introduced trading of Micro ETH Futures.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies.

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