As announced via a release on November 12, in an attempt to come up with solutions to match the rapidly increasing needs for digital coins, and help clients control bitcoin exposure, “CME Group will launch options on Bitcoin futures (BTC) on January 13, 2020”.
Per CME Group, regulatory authorization is the only requirement left that needed to be fulfilled, before the product can be publicly available.
CME Group notified that an individual Bitcoin futures contract is the representative of 5 USD-quoted BTC, which comes with a block minimum of five contracts.
“Option exercise results in a position in the underlying cash-settled futures contract. In-the-money options are automatically exercised into expiring cash-settled futures, which settle to the CME CF Bitcoin Reference Rate (BRR) at 4:00 p.m. London time on the last Friday of the contract month.”
Back in September 2019, CME Group has announced its initiative to introduce options on BTC futures in the first quarter of next year.
Tim McCourt — CME Group global director of equity index and alternative investment products – revealed that the product primarily aims to lend a helping hand to institutions and professional traders, in supervising spot market BTC exposure, and to hedge BTC futures positions in an exchange environment with regulatory clarity.