Three days before Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS), the world’s largest derivatives marketplace in terms of volume, CME Group, announced plans to list ethereum options. While CME’s ether options product prepares for regulatory review, the company detailed that the options contract will be measured at 50 ether per contract, using the CME CF Ether-Dollar Reference Rate.
CME Group Launches Ethereum Options
The Chicago Mercantile Exchange otherwise known as CME Group revealed the company’s intentions to list ethereum options contracts three days before The Merge on September 12, 2022. CME detailed that the new ether options join the firm’s bitcoin (BTC) options and micro-sized bitcoin and ether options contracts.
“These new contracts deliver one ether futures, sized at 50 ether per contract, and based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of ether,” the derivatives marketplace said on Thursday. CME’s global head of equity and FX products, Tim McCourt, noted on Thursday that the new ether options contracts add to the company’s existing lineup of crypto derivatives products.
“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 in a statement. CME Executive added:
CME Group continues to be a preferred choice for market participants as they approach the Ethereum Merge, which is expected to take place next month. The new options for managing ether risk will give clients more flexibility and precision, allowing them to better manage their exposures ahead of any market movements.
CME Group will be joining a host of other exchanges, such as Okex and Bit.com that offer ethereum contracts. Out of the four exchanges offering ETH options, Deribit commanded $10.86 trillion. This is $11.38 million in ether option volume. Deribit is the market leader in open interest for ether options, surpassing Huobi and Okex.
CME Group has the second-largest bitcoin options open interest at $441 million, while Deribit is also ahead of CME. CME comes in third place for volume of bitcoin options while Deribit is first. Okex is able to take a little more volume in bitcoin options.
With the new CME ether options, TP ICAP Digital Assets and Akuna Capital are supporting CME’s ether options roll out. TP ICAP Digital Assets is excited to support CME Group in the rollout of its full-sized Ether options contract,” TP ICAP’s head of brokering Sam Newman remarked during the announcement. “This larger-sized Ether option, in tandem with the already popular Micro Ether option, has been eagerly awaited by TP ICAP’s customers.”
CME Group will offer ethereum options for September 12, 2022. What are your thoughts? Please comment below to let us know your thoughts on this topic.
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