CME Group has just published the specifications of its upcoming bitcoin options contracts.
The Chicago Stock Exchange on Wednesday revealed that each contract would be based on one of CME's bitcoin futures (which includes five bitcoins); the contracts would be denominated in US dollars by bitcoin with a tick size of $ 25 (or $ 5 for reduced tick sizes); and would exchange from 17:00. Central time, Sunday at 16:00 Central time Friday.
An FAQ added that the options will be settled in a futures contract when trading ends.
CME has announced for the first time its intention to launch option contracts on its existing term bitcoin product, last month, with the aim of launching it in the first quarter of 2020, pending approval. regulatory.
CME's bitcoin options will be similar to the option contracts it offers relative to other futures, he said, and offers traders a way to hedge their exposure against spot and cash positions. term.
CME issued the specification a few days after competitor Bakkt announced that it would start offering a similar product on its own futures from December 2019.
Bakkt announced last week that it would begin offering options on its physically settled bitcoin futures as of December 9th. Kelly Loeffler, CEO of Bakkt, said in a blog post that the Intercontinental Exchange subsidiary had received comments from customers asking for the product.
In an interview in September, Tim McCourt, global head of stock indices and alternative investment products at CME, said the new product also inspired customer feedback.
"Where are we in the process, we have done extensive validation with members, and after this announcement we will continue to engage with market players who have a say in how the product should be designed. and…. We will continue to make sure it meets their needs, "he said.
"I think the answer has been strong. We are looking forward to market our products. When we interact with our customers, it is not very different from the future. The fact that the options will be listed on a regulated site and that they will be centrally cleared will continue to resonate in the market. "
Image of Tim McCourt via CoinDesk Archive