Crypto traders rejoice: CME boosts BTC and ETH options with daily expirations

by James · April 17, 2023

Crypto traders have something to look forward to as the Chicago Mercantile Exchange (CME), the world’s leading derivatives market, announced its plans to expand its suite of cryptocurrency options on May 22, pending regulatory review.

The Chicago-based exchange will now offer daily expirations for both standard and micro-sized Bitcoin and Ethereum contracts every day of the business week, from Monday to Friday. The move is a significant development for the crypto industry, giving traders greater flexibility and more opportunities to trade digital assets.

More options in the derivatives market for crypto investors

The Chicago Mercantile Exchange is one of the world’s largest and best-known derivatives exchanges. It was founded in 1898 as the Chicago Butter and Egg Board. It has become a global marketplace for various financial instruments, including futures, options and other derivatives.

CME is headquartered in Chicago, Illinois, and operates under the parent company CME Group. The exchange is regulated by the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA).

CME Group’s suite of crypto options includes both Bitcoin and Ether futures and options contracts, allowing investors to hedge against price volatility and speculate on the direction of the market.

The contracts are settled in cash and have become increasingly popular among institutional investors to gain exposure to the crypto market without holding the underlying asset.

According to a press release, the new contracts will allow traders to manage short-term price risk. They will complement the monthly and quarterly expirations available across all Bitcoin and Ether options on futures contracts.

In addition, options on micro-sized Bitcoin and Ether futures will add Tuesday and Thursday expirations to their existing Monday, Wednesday and Friday contracts. Giovanni Vicioso, CME Group Global Head of Crypto Products, stated:

We are pleased to offer these new options contracts to provide market participants with greater precision and versatility in managing short-term bitcoin and ether price risk.

Increasing institutional demand in this crypto sector

CME Group has reported a record daily average of over $3 billion for its Bitcoin and Ether futures and options complex in Q1 2023. This significant increase in customer demand for liquid hedging tools clearly indicates the growing interest in cryptocurrencies among institutional investors.

Trading highlights for Q1 2023 include Bitcoin futures and options exceeding 11,500 contracts, with open interest averaging a record 24,094 contracts. On March 22, a record 2,357 Bitcoin options contracts were traded, and on March 31, open interest reached a record high of 14,700 contracts.

According to the press release, Since the launch of Ether options contracts in September 2022, more than 4,600 contracts have been traded. A record 311 Ether options contracts were traded on February 22; On March 24, the open rate reached 1,800 contracts. Giovanni Vicioso concluded:

Against a backdrop of heightened market volatility in the digital asset sector, we continue to see clients turn to a trusted, regulated venue like CME Group for reliable and effective cryptocurrency risk management products.