CME Group offers daily expirations on Bitcoin and Ether options

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(Kitco News) – CME Group, the operator of the world’s largest derivatives exchange, has announced that it plans to expand its suite of cryptocurrency options across its standard and micro-sized (BTC) and Ether (ETH) contracts, pending regulatory approval.

According to the press release, the new contracts, which are set to go live on May 22, will offer expiration every day of the work week, Monday through Friday.

“We are pleased to offer these new options contracts to give market participants greater precision and versatility in managing short-term bitcoin and ether price risk,” said Giovanni Vicioso, CME Group’s global head of cryptocurrency products. “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.”

The new expirations for options on Bitcoin and Ether futures will be offered with expirations on Monday, Tuesday, Wednesday, Thursday and Friday. In addition, options on micro-sized Bitcoin and Ether futures “will add Tuesday and Thursday expirations to their existing Monday, Wednesday and Friday contracts,” CME Group said.

The new offerings were created to complement the existing monthly and quarterly expirations currently available across all Bitcoin and Ether options on futures contracts.

“CME Group continues to innovate and lead in institutional crypto options in the futures market,” said Paul Eisma, Head of Options Trading at XBTO. “By completing the short end of the implied volatility surface with the addition of the new Tuesday, Thursday Micro option contracts and weekly standard size contracts, institutional market makers like XBTO can deliver precise liquidity to market participants of all sizes who trade and hedge cryptocurrency exposures spanning every business day in the coming week for the first time.”

After an abysmal year in the crypto market that saw more than $2 trillion in value erased from the total market cap, 2023 is off to a strong start for the ecosystem, and CME Group is looking to capitalize on the renewed interest.

Through the first quarter of 2023, CME Group’s Bitcoin and Ether futures and options complex hit a record daily average of more than $3 billion, the company wrote, “indicating an increase in client demand for liquid hedging tools.”

According to the latest data from CME Group, average daily volume (ADV) for Bitcoin futures and options in Q1 exceeded 11,500 contracts while open interest (OI) averaged a record 24,094 contracts. There were a record 2,357 Bitcoin options contracts traded on March 22nd, and OI hit a record high of 14,700 contracts on March 31st.

This development comes as CME Group has been steadily rolling out various cryptocurrency-related products and services.

In August, CME Group announced the launch of euro-denominated Bitcoin and Ether futures. Then in September, the firm revealed the launch of Ether options contracts just three days before “The Merge,” which transferred Ethereum from proof-of-work to proof-of-stake, was implemented. Since launch, more than 4,600 Ether options contracts have been traded, with a record 311 contracts traded on February 22nd and a record OI of 1,800 contracts achieved on March 24th.

Last month, the CME group launched Bitcoin futures event contracts, which gave traders access to daily options on futures valued at up to $20 per contract and let them know their maximum profit or loss when they enter a trade.