CME Group, recognized as the premier derivatives marketplace globally, has revealed its intention to launch options on Bitcoin Friday futures, beginning February 24, subject to regulatory endorsement. This initiative marks the introduction of CME Group’s inaugural cryptocurrency options that will be settled in cash, with expirations available each weekday from Monday to Friday.
Cash-settled options, commonly referred to as financially-settled options, are derivative instruments where the settlement upon expiration does not require the physical transfer of the actual underlying asset. Instead, the gain or loss derived from the option is determined by calculating the difference between the strike price of the option and the market price of the underlying asset at its expiration, and the resulting amount is disbursed in cash.
“We are excited to present these new options that empower traders with enhanced accuracy in managing short-term risks related to Bitcoin’s price movements,” stated Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group. “Leveraging the success of our Bitcoin Friday futures, the smaller contract sizes and daily expirations deliver market participants with a cost-efficient approach to modify their bitcoin exposure effectively.”
CME Group indicated that these financially-settled options will bolster its existing range of cryptocurrency derivatives, which includes physically-settled options on Bitcoin and Micro Bitcoin futures.
“In light of the growing abundance of tradable influences within the cryptocurrency market, CME Group’s latest option offering on Bitcoin Friday futures delivers the detailed granularity that traders require for hedging strategies and articulating specific perspectives on Bitcoin,” remarked Joshua Lim, Global Co-head of Markets at FalconX.
Since their inception on September 29, Bitcoin Friday futures have emerged as CME Group’s most successful cryptocurrency offering, with over 775,000 contracts exchanged and an average daily trading volume of 9,700 contracts. Remarkably, 44% of these transactions took place outside of U.S. trading hours, signaling strong global interest.
