CME Bitcoin Futures Options Seem to be Hitting the Right Chord


CME has certainly become the shining light for how Bitcoin can be integrated into institutional investment platforms. The company launched its futures trading platform at the height of Bitcoin’s biggest ever price sure in December 2017, and is now reaping the benefits. 

Having launched over two years ago now, it took a while for there to be much to write home about for CME, however, late through 2019 news started emerging that the derivative trading platform would need to look at expanding due to demand. The company announced its intention to increase in the so-called spot month position limit for its Bitcoin futures contracts in September of last year. 

More so, CME also announced that, due to increased demand, it would be adding options to Bitcoin futures contracts early in 2020. That addition came earlier than expected and is due to launch next week

Now, according to the US’s largest bank, JP Morgan, the feeling is interest will be high in these new Bitcoin futures options when they launch on Jan. 13. 

What are the options?

The Bitcoin options offering from CME is an attempt to meet new demand as well as add to the company’s cryptocurrency offerings. The options will allow traders to use alternate strategies and allow them to save on margins using margin offsets. 

CME differentiates between its normal BTC options contracts and the options:

“CME options on Bitcoin futures give the buyer of a call/put the right to buy/sell one Bitcoin futures contract at a specified strike price at some future date. Upon termination of trading, in-the-money options, expire into one Bitcoin futures contract which immediately cash settles to the CME CF Bitcoin Reference Rate (BRR).”

Big anticipation

Providing more chances for the growing number of traders to invest and essentially bet on Bitcoin’s price is expected to be a shrewd move for CME. JP Morgan took note of recent strong growth in the futures market and linked it to preparation for the CME options.

JPMorgan summarized:

“This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.”

Indeed, in the week, there were reports of the Bitcoin futures market, over multiple exchanges, crossing $20 billion in a single day. However, what was interesting to note is that the major contributors to that figure were not the institutional platforms like CME and Bakkt, but rather OKEx, BitMEX and Huobi.

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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