CME Group launches Bitcoin options on futures
After announcing plans of launching Bitcoin options on futures in September 2019, CME Group has opened its options market for investors and traders. The platform made the announcement on its official Twitter handle, stating,
“Now Available: Options on Bitcoin futures offer greater capital efficiencies and a new way to manage bitcoin exposure.”
Notably, CME was the first to announce the launch of a regulated Bitcoin options market, however, Bakkt took over the actual product delivery by opening its platform for Bitcoin options on top of its Bitcoin Monthly Futures contract in December. Another exchange, FTX also launched options trading before CME, with the platform recording $1 million in trading volume. Nevertheless, the leading Bitcoin futures platform did manage to deliver the product on the said date, January 13, 2020.
While options trading is considered to be highly risky and volatile, and sentiment around the futures market as a whole has seen a dynamic shift over the past few months. This could be contributed to the fact that the a regulated futures markets, CME and CBOE, got a green light from the regulators towards the end of 2017 in order to contain the “Bitcoin bubble,” resulting in the slump of its price, according to many speculators.
On this, Bobby Ong, co-founder of CoinGecko, told AMBCrypto,
“This is probably one factor but I think there are other reasons in play too. There is usually heavy price volatility each time we lead to CME’s contract expiry on the last Friday of the month at 4pm London time.”
Further, Ong also spoke about whether the options market would see a positive response post-launch, considering the futures market did not quite meet the expectation in its early days. He said,
“Yeah I think it may be slow and will eventually grow to 20% of the derivatives market mirroring traditional markets.”