CME Group Launches Options on Ether Futures

CME Group, a derivatives market based in Chicago, announced on Thursday that it will launch options on Ether futures on September 12 pending regulatory review.

CME said such new contracts will deliver one Ether futures, size 50 Ether per contract, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate for the US dollar price of Ether.

The Ether options offerings will expand CME Group’s existing suite of crypto options contracts, including Bitcoin options and micro-sized Bitcoin and Ether options.

Tim McCourt, Global Head of Equity and FX Products, CME Group, commented on the development: “The launch of these new options contracts builds on the significant growth and deep liquidity we have seen in our existing Ether futures, which have traded more than 1.8 million contracts to date.”

McCourt said that as the crypto market approaches the highly anticipated Ethereum merger next month, CME continues to see market participants turning to the company to manage Ether price risk.

The launch of the new options is supported by market players who seek to provide their customers with broader hedging options within the crypto landscape.

Sam Newman, Digital Assets Head of Brokering at TP ICAP, said: “With the upcoming Ethereum protocol merger, we expect this new contract to see significant interest from both our traditional clients as well as crypto-native clients.”

Ryan Duckworth, Head of Trading at US-based Akuna Capital Head of Trading, also commented: “As demand for crypto derivatives increases, we look forward to providing liquidity so customers can hedge risk and manage exposure to Ether.”

CME revealed that its standard and micro Ether futures contracts have witnessed tremendous growth and continue to offer consistent client liquidity, volume and open interest.

The firm experienced record daily volumes of Ether futures trading in July, with trading volumes in the second quarter increasing 27% over the first quarter.

Respond to the needs of new customers

The latest launch aims to expand CME Group’s suite of cryptocurrency derivatives.

Early this month, CME launched Bitcoin Euro and Ether Euro futures. In March, the firm launched Micro Bitcoin and Micro Ether futures options.

Such product launches are part of CME’s efforts to provide a wide range of market participants – from institutions to sophisticated, active, individual traders – with greater flexibility and precision to manage their exposure to the two major cryptocurrencies by market cap.

Such a wide selection of global products is an important step in the growth of a thriving marketplace for institutions and sophisticated investors seeking crypto exposure in a regulated environment.

The smaller contract sizes give investors and traders greater flexibility to participate in crypto markets with smaller upfront costs while opening up the market to new participants.

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