CME Group The company announced on January 29th that they would add options to their Bitcoin (BTC Friday) futures. The launch of the new contracts is scheduled for February 24.
According to the announcement, the contracts are CME’s first financially settled crypto options product, although they are still pending regulatory approval.
Giovanni Vicioso is the Global Head for Cryptocurrency Products at CME Group. He stated that this product provides traders with tools they can use to manage Bitcoin’s short-term price risk. He continued:
“Building on the success of our Bitcoin Friday futures, the smaller size of these contracts, along with daily expiries, offer market participants a capital-efficient toolset to effectively adjust their bitcoin exposure.”
These contracts, unlike traditional weekly options will expire every day of the week, from Monday to Friday. This allows for a more accurate risk management.
The announcement also highlighted that the new options’ financial settlement adds convenience for traders seeking to hedge Bitcoin price movements without the complexities of physical settlement.
Introducing options on Bitcoin Friday futures will complement CME’s existing suite of physically settled crypto derivatives, including Bitcoin, Ethereum (ETH), Micro Bitcoin, and Micro Ether futures.
Since their debut on Sept. 29, Bitcoin Friday futures have quickly become one of CME Group’s most successful crypto product launches. The company revealed that more than 775,00 contracts had been traded. A daily average of 9,700 was reported. Noteworthy, 44 percent of all contracts were transacted during non-US trading hours.
The demand for crypto-risk management tools
This launch coincides with a period of high institutional interest for Bitcoin. Private companies are adding BTC to their treasuries, and even countries—such as US, Brazil, SwitzerlandAnd the Czech Republic—are considering it for their reserves.
Joshua Lim is the Global Co-Head of Markets for FalconX.
“Given the increasing density of tradable catalysts in crypto, CME Group’s new option suite on Bitcoin Friday futures provides the granularity that market participants need for hedging and expressing nuanced views on Bitcoin.”
Jason Urban, the Galaxy Global head of trading, agreed with the statement. He said that options are a great way to diversify your portfolio. “flexible and cost-effective way”To maximize risk management and respond to the changing conditions of the market.
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