CME to Launch Options on Ether Contracts
Posted by Colin Lambert. Last updated: August 19, 2022
Ahead of the Ethereum merge in September, CME Group says it will launch options on its Ether futures contracts on September 12, subject to regulatory approval.
The new contracts deliver one future, sized at 50 Ether per contract, and are based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the dollar price of Ether.
“The upcoming Ethereum merge is one of the most anticipated events in the crypto space to date,” says Tim McCourt, global head of equity and FX products at CME. “As such, we are seeing an array of market participants turning to CME Group to manage their Ether price risk, resulting in record open interest (+40% between June and July) and volume across both our Ether futures and Micro Ether futures contracts. We have also seen heightened activity in our September and December Micro Ether options, which could also suggest that participants are hedging risk around the proposed date of the merge – 78% of Micro Ether options open interest is in the September and December contracts.”
Sam Nwman, digital assets head of brokering at TP Icap, which supports the contracts, adds, “This larger-sized Ether option, in tandem with the already popular Micro Ether option, has been eagerly awaited by TP Icap’s customers. With the upcoming Ethereum protocol merge, we expect this new contract to see significant interest from both our traditional customers as well as crypto native clients. As part of the world’s largest inter-dealer broker, TP Icap Digital Assets has supported CME Group’s Cryptocurrency suite since our launch in 2019 and will continue to do so as we move into the next phase of institutional adoption.”