• Offerings will allow traders to hedge market-moving events with greater precision, according to CME Group’s global head of equity and foreign exchange products
  • CME Group began offering micro bitcoin and micro ether futures contracts last year

Derivatives exchange CME Group is set to roll out options on micro bitcoin and ether futures this month in a move to give more traders exposure to such instruments with nominal capital.

The options contracts, set to launch March 28, will be one-tenth the size of their underlying tokens. CME introduced bitcoin futures contracts, sized at five bitcoin, in 2020.

Futures require the buyer to purchase an asset at a certain date, while options give an investor the right, but not the obligation, to buy or sell an asset before the contract expires.

CME Group began offering bitcoin futures contracts in 2017 and launched cash-settled micro bitcoin futures contracts worth one-tenth of one bitcoin last year. The derivatives marketplace moved in November to add micro ether futures as liquidity in ether futures grew steadily with investors. 

About 5.2 million micro bitcoin and micro ether futures contracts have changed hands in less than a year, according to Tim McCourt, CME Group’s global head of equity and foreign exchange products.

“Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure,” McCourt told Blockworks in an email.

As traders favor short-dated options to manage risk, according to McCourt, the launch will feature Monday, Wednesday and Friday weekly expiries for micro crypto options.

Executives at Genesis Global Trading, Cumberland and Akuna Digital Assets said their firms will provide liquidity.

“We believe that options on these contracts will allow existing market participants greater flexibility when seeking cost-efficient exposure as well as opening the market to new participants who prefer the more granular sizing,” Akuna CEO John Harris said in a statement.

The launch comes after CME Group launched two new reference rates for bitcoin and ether Monday that provide a daily reference rate of the US dollar price of the two digital assets, published at 4 pm ET.

“We’re continually talking with and listening to clients and market participants about new ways to help them manage cryptocurrency risk,” McCourt said, declining to share specific future crypto products the company has in the works.

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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]