Details on CME Options on Bitcoin Futures Released

Traders Magazine Online News, November 8, 2019

John D’Antona Jr.

In response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, CME Group previously announced it would launch options on Bitcoin futures (BTC) in early 2020.

According to CME Group, the contracts are slated to be launched in Q1-2020, pending internal and regulator approval.

CME options on bitcoin futures settle into 1 bitcoin futures contract upon termination of trading. CME bitcoin futures are based on the CME CF Bitcoin Reference Rate (BRR), which aggregates bitcoin trading activity across five major cryptocurrency spot exchanges between 3:00 p.m. and 4:00 p.m. London time.

Options on Bitcoin futures will be available to trade on CME Globex as well as via ex-pit transactions on CME Clearport.

Here are more details:

Preliminary Contract Specifications

CONTRACT UNIT: 1 Bitcoin Futures contract (which represents 5 bitcoin)

PRICE QUOTATION: U.S. dollars per one bitcoin

MINIMUM PRICE FLUCTUATION:

Regular Tick: 5 index points ($25.00) for premium > 25 index points

Reduced Tick: 1 index point ($5.00) for premium at or below 25 index points

TRADING HOURS: CME Globex and CME ClearPort: 5:00pm to 4:00pm CT Sunday-Friday

PRODUCT CODE: BTC

LISTING CYCLE: The listing cycle will mirror that of the BTC futures. Subject to review and revision

EXERCISE PROCEDURE: European style (with no contrarian instructions)

TERMINATION OF TRADING: Last Day of Trading is the last Friday of contract month.

Trading in expiring futures terminates at 4:00 p.m. London time on Last Day of Trading.

BLOCK MINIMUM: 5 contracts

SETTLEMENT AT EXPIRATION      Option exercise results in a position in the underlying cash-settled futures contract. In-the-money options are automatically exercised into expiring cash-settled futures, which settle to the CME CF Bitcoin Reference Rate (BRR) at 4:00 p.m. London time on the last Friday of the contract month.

 

 

 

 

For more information on related topics, visit the following channels:

• Options
• Exchanges and ECNs