A global markets company CME Group has announced that in response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, it will launch options on bitcoin futures (EXANTE: Bitcoin) in early 2020.
The CME Group Global Head of Equity Index and Alternative Investment Products Tim McCourt claims that the launch of options will provide CME's clients "with additional flexibility to trade and hedge their bitcoin price risk."
"These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment," McCourt added.
Unlike futures, the option gives the buyer the right, but not the obligation, to buy or sell the asset at a predetermined price at a certain point in the future. In this case, the seller of the option is not entitled to refuse to fulfill the terms of the contract.
Earlier iHodl reported that CME plans to expand the limits to open positions in its bitcoin futures market.
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