CME Group, a US-based financial institution and the world’s largest options exchange, is set to finalize the integration of its Bitcoin futures exchange by December 17, and open Bitcoin futures for trading by December 18.
In an official announcement, Terry Duffy, CME Group Chairman and CEO, revealed that the company has received approval from the US Commodities and Futures Trading Commission (CFTC) to list Bitcoin futures and provide infrastructure around Bitcoin options, derivatives, and futures contracts. Duffy stated:
“Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize Bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward. At launch, our new Bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35 percent, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products.”
The firm stated that all their Bitcoin-related products will come with a host of risk management solutions and tools to offer the client maximum protection. CME’s Bitcoin futures will offer users a 35% margin, as well as daily price updates and limits. CME Group will also implement several other risk management tools and credit controls.
CME Group worked closely together with the firm Crypto Facilities Ltd in order to facilitate several features incorporated in its Bitcoin futures listings, including the calculation of the BRR. The daily calculation for the daily aggregated trade flow will be based on a closing time of 4 pm, London time. CME added that its BRR will use the unique “IOSCO Principles for Financial Benchmarks”. The platform also intends to implement other spot prices from prominent crypto-based exchanges around the world including, Bitstamp, Kraken, GDAX, and Itbit.
Other mainstream exchange platforms have also announced that they’re investigating the possibility of implementing cryptocurrency-based options on their platforms. Reputable firms such as Nasdaq and JPMorgan & Chase, are reported to start announcing their own Bitcoin futures options in the foreseeable future.