The Chicago Mercantile Exchange (CME) reported that the launch of option contracts for bitcoin is scheduled for January 13, 2020.
“We see that interest in cryptocurrencies and demand for risk management tools is constantly growing, so we will launch our tool soon,” the exchange said, adding that the product is still awaiting regulatory approval.
CME said that one futures contract for bitcoin will correspond to 5 BTC in US dollars, and the block will contain at least five contracts. Options will allow traders to buy and sell futures contracts at a specific price at the appointed time.
“After the exercise of an option, positions appear in the underlying futures contract with cash settlement. Money options automatically become expiring futures. They are calculated at the base CME rate at 16:00 London time on the last Friday of the contract month. ”
The exchange expects that the upcoming Bitcoin options will be in high demand among Asian traders and miners. In October, CME announced that futures were gaining popularity among institutional investors and introduced specifications for future Bitcoin options.