With brand-new physically delivered Bitcoin futures contracts now in place over the Bakkt platform, CME group now reveals it will be launching options for Bitcoin futures soon.
While the initial activity on the Bakkt site after its launch this fall was nothing if not underwhelming, eventually, investors have been putting out feelers, and the wider market may boost the use of BTC options.
Reports today at Cointelegraph chronicle the CME Group’s announcement that today that it intends to launch Bitcoin options menus in January 2020.
The move, CME Group spokesperson say, offers Bitcoin traders the ability to save on margins and mitigates counterparty default risks.
However, Bitcoin options are extremely volatile.
“In the space of a few years, Bitcoin has gone from something couch potatoes trade for a slice of pizza via a Reddit thread, to one of the hottest commodities on the market,” writes Aaron Hankin at Investopedia Nov. 6.
Hankin cites market increases as a driver for BTC options, as well as Bitcoin ETFs and other trading choices.
“In the last five years,” Hankin writes, “total daily transactions in the Bitcoin market have risen 900% from 33800 to over 335,000 according to CoinDesk. As the cryptocurrency has become more popular, so have the instruments to trade it.”
Revealing a list of examples of “expensive” BTC options, as well as a chart of Bitcoin trade volumes, Hankin suggests that CME Group’s futures work laid the groundwork for options.
“The push for options was given further validity when in October the Chicago Mercantile Exchange (CME) announced it plans to launch Bitcoin futures in the fourth quarter of 2017,” he writes. “As popularity in the cryptocurrency grows the products to trade the underlying asset will widen. Despite being relatively new, Bitcoin option trading is available in a handful of countries, which will soon include the U.S.”