Is CME’s Bitcoin, Ethereum move meant to lure more institutional investors?

One of the world’s largest derivatives exchange groups, Chicago Mercantile, intends to start trading options on micro Bitcoin and Ether futures. On Tuesday, it announced that it plans to roll out the options by 28 March.

The new options contracts are set to be one-tenth of their respective underlying tokens in size. CME introduced bitcoin futures contracts, sized at five bitcoin, in 2020.

These contracts will join the same league of the existing micro BTC and micro ETH futures that were launched individually in May and December last year.

Traders usually favor short-dated options to manage risk. To cater to the same, the novel launch will feature Monday, Wednesday, and Friday weekly expiries, along with the monthly, for micro crypto options.

Futures typically require the buyer to purchase an asset at a certain date, while options give investors the right, but not the obligation, to buy or sell an asset before the contract expires.

Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure.