Chicago Mercantile Exchange bitcoin option contracts

CME Group has released specifications for its upcoming bitcoin options contracts, awaiting SEC approval.

The stock market first announced its intention to launch bitcoin options contracts last month. The target date of launch is the first quarter of 2020, depending on the approval obtained from the regulatory authority.

The Chicago exchange revealed on Wednesday that each contract will be based on one of CME’s bitcoin futures contracts. In turn, they have the value of five bitcoin each. Option contracts will be quoted in US dollars on bitcoin, valued at $ 25, and will be transitioned from 5:00 PM CT until Friday at 4:00 PM CT.

The options will be established in a single futures contract at the conclusion of the transaction. They will be similar to those offered for other CME futures products. These offer traders a way to hedge their risks against spot and futures positions.

Interest from investors

In an interview in September, CME product chief Tim McCourt said the new product was inspired by customer feedback.

“In our processes we have done extensive validation with members and we will continue to interact with market participants who have contributed to how the product should be designed. We will continue to ensure that it meets their needs ”,

said he.

“I think the answer was strong, we are pleased to bring the options to market. The fact that the options will be listed on a regulated stock exchange and will be centrally settled continues to resonate with the market. “

CME-Bakkt Rivalry

The CME announcement comes just days after competitor Bakkt announced it would start offering a similar product for its own futures contracts starting in December 2019.

The number of futures contracts traded on CME stands at around 9000, while Bakkt recently recorded a record 1100 contracts per day.