The Chicago Mercantile Exchange (CME) Group, a leading derivatives marketplace, expanded its suite of derivative offerings on Monday by launching micro-sized Bitcoin and Ether options to cover more participants in the cryptocurrency market.
This comes two months after the security and commodity exchange company announced that it would launch a 20-year bond future to help investors better manage their US treasury curve exposure.
The new options complement CME Group’s diverse slate of more than 20 micro products that have traded more than 1.2 billion contracts since their introduction, the company said.
Goals of the New Options
Tim McCourt, the Global Head of Equity and FX Products at CME Group, said the additions build on the significant growth and liquidity the company has seen in its micro Bitcoin and Ether futures.
"Sized at one-tenth of their respective underlying tokens in size, these contracts will offer a wide range of market participants, from institutions to sophisticated, active, individual traders, greater flexibility and precision to manage their exposure to the top two cryptocurrencies by market capitalization,” McCourt added.
Robert Bogucki, the Managing Director and Global Co-Head of Trading at Galaxy Digital Holdings Limited, said the options are an important step in the development of a thriving marketplace for institutions and sophisticated investors who want crypto exposure in a regulated environment.
“The smaller contract sizes will give investors and traders greater flexibility in managing their exposure to the two biggest cryptocurrencies in the world, opening the market up to new participants. Galaxy Digital is excited to act as a liquidity provider for these options and other CME Group cryptocurrency products,” Bogucki explained.
On his part, Steve Sanders, the EVP of Marketing and Product Development at Interactive Brokers, said the company is excited to add the new offerings to the wide range of global products currently on its platform.
"We continue to see interest in cryptocurrency exposure from our active trader and institutional investor clients. CME Group's Micro Bitcoin and Micro Ether options will certainly benefit our clients seeking enhanced flexibility to participate in cryptocurrency markets with less upfront cost,” Sanders added.
Derek Devens, the Senior Portfolio Manager, Options Group, at Neuberger Berman, expressed his company’s excitement at the new offerings, adding that the options will better align with the average crypto investor's exposure.
Devens added: "We expect the pioneering exchange-traded, centrally cleared offering will appeal to over-the-counter cryptocurrency options market participants and facilitate increased market liquidity and price stability across cryptocurrency futures and options in U.S. listed markets."
CME Group's Recent Growth Posture
Last month, CME Group executed changes in its management team to usher in the next phrase of its growth journey. “As we continue to transform our business, we are restructuring our management team to further sharpen our focus and enhance our ability to achieve our strategic priorities for our clients, shareholders and employees,” Terry Duffy, the Chairman and Chief Executive Officer at CME Group, said.
In its fourth-quarter report for 2021, the company posted 22.5% year-on-year growth in operating income after ending the quarter with a net income of $625.2 million.
In the same period, the company recorded a surge in trading demands as its average daily volume for the final quarter of the year increased by 26 percent year-over-year to 20.5 million contracts.
“We are pleased 2022 is off to a strong start with our highest January average daily volume on record of 24.6 million contracts, led by strong equity index and interest rate volumes,” Duffy had said.
