CME Group to Roll Out Micro-Sized Bitcoin and Ethereum Options


In an announcement on March 1, the CME Group outlined plans to launch options on Micro Bitcoin and Micro Ether futures on March 28. The new products will offer a tenth of the exposure to the underlying asset opening the investment products up to a wider market which includes individual traders.

The announcement added that these new options will complement the existing Bitcoin options contracts launched in 2020, sized at 5 BTC.

A futures contract requires the investor to sell them on a specific date, whereas options grant an investor the right, but not the obligation, to buy or sell at a particular price at any time.

Widening the Market Reach

Additionally, the new options will allow traders to express long or short-term views with a choice of monthly as well as Monday, Wednesday, and Friday weekly options expiries, it added.

The CME Group already offers micro-futures for the two leading crypto assets, but it is now adding flexibility in the options products. Global Head of Equity and FX Products at the company, Tim McCourt, commented that nearly 5.3 million micro BTC and ETH futures contracts had been traded in less than a year, before adding:

“Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure.”

John Harris, CEO of Akuna Digital Assets, said his firm believes that options on these contracts will “allow existing market participants greater flexibility when seeking cost-efficient exposure as well as opening the market to new participants who prefer the more granular sizing.”

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In November, Google’s parent firm Alphabet invested $1 billion into the CME Group.

CME crypto
Chicago Mercantile Exchange. Source: Yahoo

No Spot ETF In Sight Yet

CME futures products are the only underlying contracts for all Securities and Exchange Commission-approved Bitcoin ETFs in America to date. The U.S. regulator still refuses to greenlight a spot-based fund that will be backed by the physical asset itself. There has been mounting pressure from financial experts and even politicians, but the watchdog has remained resolute so far, citing the usual investor protection excuses.

The highly-anticipated conversion of the Grayscale Bitcoin Trust into a spot ETP could be the first to gain approval this year. The $31 billion fund is currently trading at a -24.45% discount in anticipation of this.

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