Cboe Gets Approval for Margin Trades of Bitcoin Futures, Opens Gates for Spot Trading

On Monday, June 5, Cboe Global Markets secured a license to offer margined Bitcoin and Ether futures contracts to its crypto clients. Cboe has been one of the earliest players for offering Bitcoin futures contracts in the market.

In the latest development, Cboe has secured approval from the U.S. Commodities and Futures Trading Commission (CFTC) for offering physical and financially-settled margined contracts, starting from the second half of the year.

So far, Cboe has been offering only fully collateralized trading of crypto futures. However, as per these agreements, the clients had to put up the entire amount of a contract before trading. With the margined trading facility, traders will need to put up less capital while opening a position.

Also, the physical settlement of crypto assets will allow traditional firms to access Bitcoin and Ether futures without any custodial requirements from the intermediaries. Cboe Digital President John Palmer further explained:

“That’s where the concept of us also having a spot market has advantages. We didn’t want to have to force participants to custody or touch the physical asset.”

Cboe Digital Will Offer Crypto Spot Trading

Palmer also said that the new entity i.e. Cboe Digital will also continue to offer spot trading under the same entity. Cboe Digital is a registered exchange in the United States that offers trading services for digital assets such as Bitcoin, Bitcoin Cash, Ether, Litecoin, and USDC. It is the only platform offering both spot and derivatives trading options for these assets, along with operating a clearinghouse.

Cboe also hinted that it wants to grow the number of tokens currently trading on its platform. These margined contracts will require the use of an independent futures commission merchant as an intermediary.

This development comes at a time when the SEC has been going hard after digital assets. On Monday, the SEC slapped a lawsuit on crypto exchange Binance which now has over $115 billion of digital assets under its purview.

Cboe primarily serves professional and institutional traders. Some of its top clients include DRW, Galaxy Digital, Interactive Brokers and Robinhood Markets Inc.