CME to Launch Micro Crypto Options
Posted by Colin Lambert. Last updated: February 21, 2024
Less than a year after it launched micro futures contracts on Bitcoin and Ether, CME Group has announced plans to launch options on the micro futures contracts.
The launch is scheduled for March 28, pending regulatory review. The new options contracts will be one-tenth of their respective underlying tokens and traders will have a choice of monthly, as well as Monday, Wednesday and Friday weekly expiries.
“We have worked closely with clients and the broader industry to establish robust and liquid cryptocurrency futures and options markets at CME Group,” says Tim McCourt, global head of equity and FX products, CME Group. “At less than a year old, nearly 5.2 million combined Micro Bitcoin and Micro Ether futures contracts have changed hands. 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.”
The move has been welcomed by market participants, with Joshua Lim, head of derivatives at Genesis Global Trading saying, “Micro options provide the targeted risk exposure that investors are looking for,” while Rob Strebel, head of relationship management DRW, whose Cumberland is a liquidity provider on CME, says, “In working with our institutional counterparties, we know there is strong demand for safe, regulated exposure to cryptoassets. This innovation from CME Group provides welcomed flexibility in the listed options space, and we expect these products will help attract new investors and grow the crypto ecosystem.”
Meanwhile, John Harris, CEO of liquidity provider Akuna Digital Assets, adds, “We believe 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.”