Chicago, September 12, 2022, CME Group, the world’s leading derivatives market, announced the launch of options on Ethereum futures.
According to Tim McCourt, global head of equities and foreign exchange products at CME Group, interest in ethereum derivatives has grown as market participants look forward to the upcoming ethereum merger, an update on one of the largest cryptocurrency networks that could be a game-changer. is proliferating. The launch of our new Ethereum options contract is particularly well-timed, providing the crypto community with another important tool for gaining and managing ether exposure.
Earlier news pointed out that on August 18, the Chicago Mercantile Exchange Group (CME Group) announced that it plans to launch Ethereum futures options on September 12, pending regulatory review. These new contracts deliver an Ethereum future with a size of 50 ETH per contract.
As the world’s leading derivatives marketplace, CME Group enables clients to trade futures, options, cash and over-the-counter markets, optimize portfolios and analyze data—enabling global market participants to effectively manage risk and seize opportunity. CME Group Exchange offers the broadest range of global benchmarks covering all major asset classes, including interest rates, stock indices, foreign exchange, energy, agricultural commodities and metals. The company offers futures and options on futures trading through CME Globex, fixed income trading through BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates CME Clearing, one of the world’s leading central counterparty clearing providers.
Options and futures are a type of derivative product that provide traders with another way to speculate on specific assets. Futures contracts force the holder to buy or sell an asset on a specific date; options contracts provide the same functionality, but do not force the holder to buy or sell (just options that do). Thus, Ethereum options enable investors to buy or sell the second-largest cryptocurrency by market capitalization on a specific future date.
For CME Group, the high volume of trading in the Ethereum futures product was the main reason for the eventual launch of options. Tim McCourt, the firm’s global head of equities and foreign exchange products, said its ethereum futures “increased average daily volume by 43% year-over-year”. The launch of the options product provides traders with greater flexibility in the derivatives market.
With the merger tentatively scheduled for September 14, Ethereum will experience one of the most anticipated updates since the network launched. The update will see the Ethereum blockchain transition from an energy-intensive Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) mechanism. Among various changes, the Ethereum Foundation believes that the merger event will reduce the energy used by the network by 99.95%. Speculators, miners, and various cryptocurrency companies are gearing up for the upgrade, and some are even looking forward to a new forked version of Ethereum. Regardless of the outcome, however, CME Group is clearly hedging all bets.
Rob Strebel, Head of Relationship Management at DRW, said: “Options are an important part of the trading strategies deployed by Cumberland’s institutional counterparties, whether to hedge risk or gain exposure to an asset class when it is not on the balance sheet. .CME Group has proven the trading and clearing infrastructure to support this product and we are excited to provide liquidity on day one. As Ether transitions in this week’s expected consolidation, we expect we will continue to see a Strong demand for this ether options contract.”
Leon Marshall, Head of Global Sales at Genesis, said: “Genesis is proud to consistently provide day-one support for CME Group’s expanding suite of crypto derivatives and provide our institutional clients with the latest derivatives products. In the highly anticipated The launch of the new ethereum options contract ahead of the ethereum merger provides our clients with greater trading flexibility and hedging against ethereum price risk.”