CME Reveals Specifications of Its Bitcoin Options
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Oct. 31, 2019
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Chicago Mercantile Exchange Group (CME) has just published the preliminary specifications of its upcoming bitcoin options.

CME revealed yesterday each option will be based on a CME bitcoin futures contract (which are made up of five BTCs each). The contracts will be quoted in US dollars and will be traded between 5:00 p.m. CT on Sunday, until 4:00 p.m. CT on Friday.

Bitcoin options will share their expiration date with bitcoin futures, their underlying assets.

CME first announced its intention to launch bitcoin options based on its futures contracts last month. The company reported then that the launch is scheduled for the first quarter of 2020, after it receives approval from regulators.

These options will be similar to the option contracts it offers on other futures products, and offer traders a way to hedge their risks against spot and futures positions.

Tim McCourt, CME global head of equity index and alternative investment products, has explained that CME's upcoming bitcoin options "are very similar to the way other options in the marketplace work. The difference here is the underlying, or the deliverable, of the options contract, is a CME Group Bitcoin future."

Bakkt has recently announced it plans to release its own bitcoin options contracts in December, before CME launches its own version of the instrument.

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