Chicago Mercantile Exchange expects that more varied exposure and precise hedging to bitcoin will prove popular in Asia, following the launch of its options offering for the cryptocurrency slated for the first quarter of 2020.
Tim McCourt, CME’s global head of equity products and alternative investments, said he expects the popularity to match that of the bitcoin futures market which the group launched two years ago.
In an «SCMP» report, McCourt noted that up to half of CME's related futures trading volume was attributable to Asian and European participants. Year-to-date, CME registered an average daily trading volume of about 35,000 bitcoin from 7,000 futures contacts. On May 13, it posted a record-high of 34,000 futures contracted traded worth $1.3 billion.
Crypto Miners
According to McCourt, he expects demand to derive not only from traders but also miners seeking more precise exposures, citing notable demand from operations based in China.
«While futures give you a one-for-one exposure […] an option gives you varying strike-price levels and can give you either downside protection or upside exposure at a fraction of the underlying [asset’s] price,» he said, adding that CME had no plans to launch contracts with physical delivery.
Market access to new types of Bitcoin-related exposure continues to grow as investors seek alternatives in an increasingly uncertain environment. Leonteq most recently launched a reverse convertible structured note to Bitcoin for investors with a sideways trending to slightly positive view on the asset cryptocurrency.
