The Chicago Mercantile Exchange (CME) Group is adding options to its Bitcoin (BTC) futures contracts in the first quarter of 2020, pending regulatory review.
The development was announced in a news release on Sept. 20.
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.”
McCourt added that the new products are intended to help institutions and professional traders manage spot market Bitcoin exposure, as well as enable them to hedge Bitcoin futures positions in a regulated exchange environment.
CME Group’s announcement notes that, since the launch of Bitcoin futures on the exchange in December 2017, there have been 20 successful futures expiration settlements, with more than 3,300 individual accounts trading the product.
Year to date, a reported 7,000 CME Bitcoin futures contracts — equivalent to roughly 35,000 BTC — have traded on average each day.
For clients hedging or trading benchmark options on futures across diverse asset classes, CME Group notes that it has seen an average daily volume of 4.3 million in 2019 thus far.
Meanwhile, institutional interest in CME Bitcoin futures peaked in early summer 2019, with a record 56 large open interest holders reported in July.
This intense uptake has been gradually building all year, with previously reporting that, in May, CME Bitcoin futures had hit a then all-time high.
Elsewhere in the institutional Bitcoin futures space, Bakkt Warehouse — the qualified custodian for crypto trading platform Bakkt — began accepting customer Bitcoin deposits and withdrawals earlier this month.
Bakkt intends to launch physically delivered Bitcoin futures, in contrast to the existing cash-settled Bitcoin futures offered by both CME and the Chicago Board Options Exchange.