55 Contracts Mark First Day of Bitcoin Options on CME

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Fredrik Vold

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Fredrik Vold

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June 26, 2023 06:54 EDT

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Following the launch of bitcoin options trading on the Chicago Mercantile Exchange (CME) yesterday, the exchange reported that 55 options contracts changed hands during the first day of trading.

Each options contract at the CME represents a right, but not an obligation, to buy one bitcoin futures contract, which in turn represents 5 bitcoins. That means bitcoin options worth a total of 275 bitcoin – or about USD 2.3 million – were traded on the first day. That compares to a volume of only USD 381,000 on Bakkt, according to data from crypto analytics provider Skew.

Meanwhile, other competitors have performed better:

Also, Sam Bankman-Fried, founder and CEO of FTX, a crypto derivatives exchange, co-owned by Binance, that launched their options trading this past weekend, said yesterday that the platform had “BTC 1,700 of options traded in the last 24 hours.”

Commenting on the significance of the move by CME, Mike McGlone, an analyst with Bloomberg Intelligence, said that he views the launch of listed options contracts as a “significant step in the direction of increasing exposure to bitcoin,” according to a Bloomberg report.

“Options are only launched and tradable on a liquid underlying and the trend in BTC futures on the CME is increasing volume and open interest,” McGlone noted, referencing the recently surging interest in bitcoin futures trading on the CME.

However, he also added that one day of trading is not enough to get a good understanding of the demand for these new products and that the first weeks and months will provide a clearer picture on the state of the new bitcoin options market.

In the same report, CME Group itself also expressed satisfaction with the reception the exchange’s new product has received.

“Although it takes time to grow any new market, we’re pleased with the response from customers and market participants so far,” said Tim McCourt, global head of equity index products at CME.

The comments came after a note written by strategists at JPMorgan Chase & Co indicated “high anticipation” for the launch of CME’s bitcoin options market, as reported on Monday.