Cryptocurrency
Exchange provider CME Group expects bitcoin options to be a hit with Asian cryptocurrency traders, miners
As reported by South China Morning Post, “CME Group said it expects the upcoming launch of options on bitcoin futures contracts to draw demand from cryptocurrency miners and traders in Asia. “The US futures exchange is aiming to launch the new crypto-derivative product during the first quarter of 2020. “Tim McCourt, CME Group’s global head […]
As reported by South China Morning Post, “CME Group said it expects the upcoming launch of options on bitcoin futures contracts to draw demand from cryptocurrency miners and traders in Asia.
“The US futures exchange is aiming to launch the new crypto-derivative product during the first quarter of 2020.
“Tim McCourt, CME Group’s global head of equity products and alternative investments, said he expects the new contracts to prove as popular as bitcoin futures, which were launched almost two years ago. As much as half of trading volume for futures is accounted for by Asian and European participants.
“McCourt said trading has picked up recently for the bitcoin futures. On May 13, a record 34,000 futures contracts were traded, worth US$1.3 billion, and equivalent to 170,000 bitcoin.
“Now with options on futures, traders will have the ability to more precisely gain exposure to or manage the price risks of bitcoin.
“’While futures give you a one-for-one exposure, whereby the movement of the underlying bitcoin translates directly to a specific dollar value per contract, an option gives you varying strike-price levels and can give you either downside protection, or upside exposure at a fraction of the underlying price,’ said McCourt.
“An options contract gives an investor the right to buy (a call option) or sell (a put option) the underlying asset at a specific ‘strike price’ on or before the expiration date, allowing the opportunity to take advantage of price moves without actually owning a futures position outright. A futures contract places an investor under the obligation to buy or sell the underlying asset at a contracted price at a specified future time.”
Continue to read the full story at South China Morning Posts’ website.
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